Credit Rating
Credit rating is something that lenders go through in order to check how much of a credit risk you possess. Your credit rating generally consists of –
- Recent address history
- Any loan balance or credit that’s pending
If you have a bad credit rating you should try to improve it in order to get a loan from a lender.
Reasons You May Have a Bad Credit Rating
If you have missed any payments
This is the most important thing when it comes to credit rating. Lenders will have a look at your previous payment history to see if you have missed any repayments in the past. If you have, it shows that you have a difficult time when it comes to repaying the borrowed loan and managing your money. They may not lend you a loan because of this.
However, there are lenders who provide 6 Month Loans to people who have a bad credit rating.
Apply for too many loans
If you make a lot of application to a number of lenders in a short time span, then they might see you as someone who is struggling financially. When you apply for a new loan every time, it goes in your credit report. This credit rating report shows how many times you have applied and been rejected for a credit. So, avoid making too many applications at once.
Didn’t update your current address
If you have recently moved to a different location, and forgot to update your address in the electoral roll, it affects your rating. When the lender does a background verification they find that the address you have provided is wrong and not updated. They may find this as a risk and not provide you with a loan. Also, if you change addresses frequently, it affects your credit rating.
Improve Your Credit Rating
Make timely payments
Don’t forget to miss any of your payments. Keep up to date and make timely loan or any credit card payments. If you maintain this paying habit the lender would find you creditworthy, as you don’t have a bad credit rating anymore. This improves your chances of getting a loan.
Update your address on the electoral roll
Don’t forget to update your address when you move to a new location. Lenders or banks always check your personal details like name and address. If anything among that is incorrect or false, it might drain your chances of getting a loan and also will have a bad effect on your credit rating.
Check for fraudulent activity with your name
If your credit report contains any fraudulent activity that does not apply to you, contact the credit rating agency and get it updated. The activity can be like someone else applying for a loan with your name and you don’t have any knowledge whatsoever about that. Getting your report updated will show some good credit rating.
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