If you’ve ever had a loan application declined it could be because there are some items in your credit report that are scaring off lenders.
Furthermore, often these warning flags appearing in your credit report are often quite easy to rectify.
So if you aren’t aware of them they could be causing your credit rating to look poor to lenders & other credit providers.
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Top 3 Items In Your Credit Report That Harm Your Credit Score
1. Too Many Credit Applications
While having a few credit cards shouldn’t harm your credit worthiness, opening multiple credit facilities in a short space of time will raise a red flag with lenders.
What this activity tells lenders is that you could be experiencing financial difficulties and that to extend more credit your way would be too risky.
2. Other People’s Debt
Who hasn’t been asked to sign surety for a nephew, a friend or other family member?
You may have even forgotten about standing surety for someone who has fallen behind in their payments or not managed their debt responsibily.
This bad credit behaviour will then impact on your credit worthiness which will then harm your credit score & hamper your chances of securing credit at favourable rates.
Therefore, potential lenders will view your guarantorship as part of your debt load even though you’ve managed all your payments responsibly.
3. Too Many ‘Hard’ Credit Enquiries
Multiple credit applications triggers a credit report being drawn on you by each lender – known as a ‘hard’ credit enquiry.
Not many people are aware that this type of activity is likely to damage your credit score without you even realising it.
Furthermore, you may only get to feel the impact of this when you apply for a new cellphone contract or purchasing home appliances on credit when your application is declined.
Therefore, it’s always best to ensure credit applications are only made when absolutely necessary & not to go from one lender to another in the hope your application is approved.
This behaviour will only result in your credit score being dragged down further.
5 Steps To Increase Your Credit Score
Check Your Credit Score
You are entitled to at least one free credit report every year so it’s important that you check your credit score to ensure that you avoid any of the credit items that scare away lenders.
Most of the big credit reporting agencies will provide you with a credit score check.
For example you can get your credit score check from TransUnion credit bureau for free.
By doing this you will always know your credit status and be able to take timeous steps to improve it before applying to make a sizeable purchase.