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Signs That You Might Have Bad Credit

24 December 2018 No Comment

The amount of people that have bad credit but don’t know are tremendous. People usually don’t check their credit reports frequently, and when they do, their credit score would already be terrible. If you don’t already know, credit scores range from 200 to 850; a good credit score would start from 670 and a slightly low credit score would range from around 300 to 620. A low credit score could affect your chance of getting a mortgage or rent an apartment. You’d also have to pay higher interest rates if you want to take out a loan. It may be a good idea to create a frequent habit of looking over your credit report to avoid bad credit.

If you’re going through any of these signs, chances are you have bad credit.

1. Trouble Finding a Job?

Employers often use credit reports to see how potential employees have managed their financial situations in the past. 1 out of 10 job seekers have been turned down from job opportunities due to their credit issues. This is the most common wake-up call people get in regards to credit. If you’ve been having trouble getting a call back from jobs, check your credit report!

2. Late/Missed Payments

Whenever you miss on payments you owe or pay later than your due time, your credit report will reflect this. This is the number one reason why people have bad credit scores. If you pay your bill more than a month later, you have a big chance of being reported to the credit bureaus. If you avoid at least this sign, your chance of having a bad credit score will definitely decrease. You have two options in the case of late/missed payments. The first one is to contact your biller beforehand if you’re going to pay late and study the options you’ll be offered, but this is only if you catch the problem early. Your second option is to evolve financial solutions externally without any difficulties.

3. Difficulty Renting

Landlords and mortgage issuers both check a person’s credit and that’s extremely likely to happen when submitting an application to rent. Landlords want to make sure that they won’t have to chase a tenant for the past few months’ rent. If you’re having difficulty renting, it’s probably your bad credit reflecting on you.

4. Recently Closed an Old Credit Card Account

Credit scores get lower when you close an older account and open a new credit account. Even if you’ve never missed payments before. Credit bureaus usually look at the average length of credit history of all your accounts. Basically, the longer your credit account has been active, the better. This is why experts recommend keeping your oldest credit cards if you’re planning to apply for home loans or become involved in major credit events in order to avoid lowering your credit score.

Stay alert. Getting out of bad credit is very much possible, but it’s a really hectic process. You should make sure to check your credit at least once a year or every quarter if you can, to avoid any issues ahead. Study your financial spendings every once in a while to know how you can lower your debt-to-income ratio. Finally, always track your credit score. Some credit bureaus offer monitoring services that can notify you anytime your credit score changes. This will definitely help you have a stable financial credit score.

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