A credit score is basically what any lender will look at before availing you the credit service that you need. Whether you are applying for a credit card, a business loan or even a mortgage, you will not be able to succeed with a poor credit score. It is vital that if your credit score is already poor, you work on repairing it first before you go seeking the credit services.
Causes of and how to repair a poor credit score.
· Little or no credit history at all.
Sometimes, you might never have borrowed from any institution. When you approach a lender and he pulls your credit score, there is not much to go by. The lender might be hesitant about availing you credit because he is not sure whether or not you have the ability to pay at all. This can only be solved by trying to get a few credit services and servicing them well so that a lender sees your potential and is able to trust you.
· Mistakes on credit files
There are times when you might take a credit facility but not fill the credit application forms with all the correct information. Every credit facility that you take leaves an electric trail that future lenders will look at. Simple information like the business you are doing, you contacts and postal address need to be filled correctly in order to avoid mistakes that make you look like you have a poor credit score.
· Not paying on time
This is the biggest contributor to poor credit scoring. When you go to credit scoring sites such as The Experian scoring system, you will realize that most people are given a poor score because of small loans and credit card bills that they failed to pay on time. It is prudent that when you take a credit service, you make arrangements to have your payments done on time so that this does not affect your future borrowing.
The most important tip on how to repair a poor credit score is to look back at all credit facilities that you might have taken in the past and correct all the mistakes that might have been made. If you didn’t finish your payments, make arrangements to do so. If you made some simple mistakes while filling the application forms in your previous facilities ensure that you correct them and have your lenders update the information. There are times when you might be listed as having a poor credit score by mistake. Go through every little thing and ensure that information is captured and filed correctly. This way if the poor credit score was given because of these mistakes, you will be able to correct them.