- April 11, 2020
Find Grim To Know About Credit Score Concept? Read This Blog To Know!
Credit score plays an imperative role while securing funds with the help of loans. It is crucial to know everything about credit score so that you can better acquire funds without putting unnecessary onus. However, many borrowers take money without knowing what credit score is.
If you are one who wants to gain information about the credit score, then read this blog. We have covered almost every part of it so it would be easy for you to use funds to fulfil the dreams or to gain financial stability.
The first step that you should know what is the proper time to get assistance with loans. There are different types of loans. But, before taking it, you must know about the current financial situation.
Now, let’s learn more about the credit score.
What Is The Credit Score?
It is the score that is provided by the credit agencies who tracks your borrowing history. If you fail to repay the borrowed money on time, then it directly affects the credit report. But, if you pay the money on time, then it shows a positive influence on the report.
You can see the below-mentioned credit score on which good, bad, and excellent are decided.
Good – 881-960
Fair – 721-880
Very poor- 0-560
What is the lowest credit score?
Very poor- 0-560 is the lowest credit score.
You can check down on which category you belong to. According to it, the lender will charge the interest rate. For instance, the loan provider may charge high interest if you have a poor credit score or low APR in case of good credit history.
Nevertheless, people with poor credit score face problems, but many direct lenders offer loans, like 12 month loans for bad credit people. But, numerous times, people fail to identify the reason behind the drooping score.
Let’s have a look at the reason.
Why Has My Credit Score Gone Down?
There could be several reasons that may affect the existing credit score. We have collected the possible scenarios below.
- Maximum use of credit card
If you are using the credit card blindly, then it may affect the score. You may be unaware of the fact that is using credit card unnecessary put more negative influence over the credit score. So, it is vital to use the card carefully, and in such a way that you can repay the payments on time. You can reduce the usage to improve the credit score.
- Forget to pay small bills
In most of the cases, people forget to pay small bills. The reason is that the sizeable pending amount draws more attention because it affects the credit score fast. So, the focus shifted to them promptly as compare to them.
But, it should not happen because small ones may together introduce a significant problem. So, make sure that you contribute small amount at large ones, and clear the small ones fast. In this way, you can avoid such problems.
- Make unnecessary purchases
If you make large buying without knowing the consequences, then you find it challenging to repay the money. And, once you make the late payments, then it shows that you are not a good borrower. But, many such situations occur where one fails to repay the money.
In such cases, you can contact the lender and share your problem with them. If they convince, then rescheduling may be the right options for you.
- Apply for multiple loan application
Applying for numerous applications is another reason that affects the credit score. Never, apply for different loan application at the same time. If you get a rejection, then find some another method to secure funds.
- Overlook the minor errors
Not every time the mistake made by the borrower, there are errors performed by the company. Many people forget to check the credit reports obtained from the agencies. You can read the report, and if you find out any issues, you can contact them to remove the error.
However, there are loans, like doorstep loans for unemployed, where soft or no credit check is run. Conversely, it depends on the situations too.
It is the detailed analysis of the credit score, and now you can realise the importance of credit score. Follow the points as mentioned earlier to check why your credit score goes down.