Having a poor credit score may mean that you get turned down when you apply for financial products such as mortgages, credit cards, or loans. This may be something that you have experienced and so might be wondering why your credit score is so poor in the first place. Some of the most common reasons why people have poor credit scores are listed below.
Having your identity stolen
Despite doing everything that you can in order to get a good credit score, your personal details could unfortunately become compromised and all of that hard work ruined by a nefarious individual running up large credit card bills in your name. Although you may think this will not ever happen to you, identity theft is something that is sadly becoming increasingly popular.
Making yourself bankrupt
It may not be a surprise that by making yourself bankrupt has a significantly negative effect on your credit score. This is also true if you go into an individual voluntary arrangement with a lender.
Not having any credit history
If you are someone who has never in their life had a loan or credit card, then it is likely to be the case that your credit score is poor. The reason for this is that the agencies for credit references do not hold any information on you and so have nothing to base their decision on when giving you a credit score. They do not know whether or not you can be trusted to pay the money back and in a timely manner also.
Not sticking to credit agreements
By either making a later payment, missing a payment, or paying less than what is required as part of the credit agreement that you are in, then this goes on your record and has a negative impact on your credit score. If you do this repeatedly over time then your credit score will go as far down as possible.
Having the wrong type of credit card
When applying for a credit card, it is important that you choose one that has fees, interest rates, and a credit limit that will allow you to stay on top of the repayments and within the limits of your balance. These two things are factors that agencies for credit references use when determining your credit score.
Paying just the minimum amount
Whilst it is tempting to pay off as little as possible each month on your credit card, it is not so good for your credit score. Not only will paying off more than the minimum improve your credit score, but it will also mean that you end up spending less on interest also, thus saving you money in the long run.
If you are someone that has a poor credit score and are in need of some quick cash, then getting a seedcash loan is a great way of doing this and can be done online from the comfort of your own home.