When you have a bad credit score, it becomes difficult for you to obtain a mortgage or an auto loan. Any lender would look first at your credit report to determine whether you are eligible for credit or not. The credit score depends on your financial activities including payment and debt history, which helps lenders predict whether you will be able to repay the loan in the future. Thus, it becomes important to have a good credit score.
Activities Bad for Your Credit Score
You must manage your credit score well to be eligible for future mortgages and loans. Below are certain things and activities that are bad for your credit score.
Late loan payment: whether it is a credit card loan or any other if you are repaying them late it will be bad for your credit score. Even if you have made a credit card loan payment beyond its stipulated usually 30 days period, it has the potential to impact your credit score adversely. The other payment issues including bankruptcies, collection actions, and foreclosures also impact your credit score adversely and reduce it. Therefore, you must make all the payments of loans and debts on time.
Excessive utilization of available credit: in general, if you are utilizing more than 30% of the credit available to you, it can be a cause of concern and reduce your credit score. If you take excessive loans and utilize the available credit limit to a great extent, the creditors become concerned that you already owe too much money or are excessively short on cash.
Short account history: in case your accounts are 7 years or less of age, they are considered to be unproven in managing credit. Therefore, you must set up your accounts early and keep them open.
Singular credit: if you use any single debt and loan type (such as a student loan or a credit card loan), the creditors and lenders do not find you proficient enough to manage other kinds of loans and debts including mortgages. Therefore, it is better to use different types of credit and pay off all your loans and debt timely.
Multiple new applications: if you have applied for many different kinds of loans and credit cards in a short period, the lenders may get suspicious due to the excessive activity.
Melbourne Credit Repairs to Your Rescue
The expert Melbourne credit repair services ensure that you only have fair and accurate loans and any kind of error on your financial and credit statements is disputed and removed. The services for Melbourne credit repairs utilize the latest technology, educational and communication/negotiation approaches, and customized tools to improve your financial credit score and help you accomplish your life and credit goals in time.