- If you constantly delay your payments, it can affect your credit score.
- Multiple outstanding loans can also affect credit rating, increase debt burden and hinder repayment ability.
- Applying for multiple loans or credit cards sends a message that you desperately need credit.
When you apply for a loan, the financial institution verifies your
A good credit rating will secure you in many ways when it comes to getting a credit card, car loan, home loan, and more. Your credit score – a three-digit number – is derived from a detailed analysis of your credit history. which includes each major financial milestone, your general behavior in handling money and other valuable assets you have created, in addition to your general attitude towards financial obligations, including your utility payments. Neeraj Dhawan, Managing Director of Experian India, explained the role of credit reports and scores for
Main reasons for a bad credit rating:
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* Deferred repayments: When borrowers delay their repayments, it leads to bad credit. If you constantly delay your payments, it can affect your credit score. The higher the number of late payments, the greater the impact on the credit rating of the dropdown.
* Multiple loans: Multiple outstanding loans can also affect credit rating, increase debt burden and hinder repayment ability.
* Do not have a long credit history: Having a long credit history helps maintain your credit score. If possible, you should keep your old credit cards open rather than closed to allow you to capitalize on years of good credit history and repayment behavior.
* Apply for multiple loans or credit cards: Applying for multiple loans or credit cards sends a message that you desperately need credit. It is advisable to space out your credit card and loan applications instead of applying them simultaneously. To avoid triggering difficult inquiries due to multiple credit inquiries, you can download your free Experian credit report and share it with lending institutions.
* Not reviewing your credit report: A credit report summarizes all your personal information, credit transactions, credit accounts and repayments. Any discrepancy in your credit report can lower your credit score. To ensure the factual accuracy of your credit report, it is advisable to check your credit report and score regularly.