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What causes bad credit?

What causes bad credit?

What can cause bad credit

Bad credit occurs for many reasons and can cause you to get mortgage applications rejected and credit card applications turned down. Don’t worry though, you can still apply for bad credit loans and can also take steps to improve your credit rating. Here are a few things that cause bad credit ratings.

Declaring bankruptcy

Perhaps one of the more obvious reasons is declaring bankruptcy. If you’ve been unable to pay your debts in the past, this can affect you further down the line.

Failing to stick to a prior credit agreement

Making a late payment, missing one all together or even just paying less is a good way to ruin your credit score. Each time it happens it gets added to your credit history and could lead to your score becoming ‘very poor’.

Identity theft

This one can be a huge kick in the teeth. If you’ve been working really hard to get your credit rating back on track or have been able to keep it high all along, a case of identity theft can really put a spanner in the works. Not only could they run up huge debts, but they could harm your rating too.

Having no credit history

You would have thought that having no debt is a good thing, but it can actually have a negative effect on your credit rating. A lot of young people applying for loans and first time buyers for houses can really struggle with this one. Direct lenders simply don’t have enough to go off when they’re trying to decide whether you’ll be able to pay back your loan or not. Sometimes it’s worth getting a credit card and paying things off it as soon as you can to build up your score.

Regardless of your credit score, Loan Bird can help find a financial solution that suits your needs. From bad credit loans to payday loans, we can source a number of options for you. Simply use our online form and you could have money in your account in no time.

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