When it comes to managing your finances, there are lots of things that can impact them. Financial emergencies can force you into dire straights and you may have to take out same day loans to see you through. Other things that can impact your finances are your budgeting skills and your credit score. Your credit score can fluctuate over time, and it can be affected by lots of different factors. Having a bad credit rating can impact your finances and it can feel like it’s come out of nowhere. So you know what to look out for, we’ve put together a handy guide showing you the top 5 signs that your credit rating has tanked.
- Rejected Finance Applications
If you’re finding that no matter which lender you apply to, you get rejected, then it could be a sign that your credit score is low. Lenders will always assess your credit score and ensure that it’s high enough to not pose you as a risk. Low credit scores suggest that aren’t able to make repayments on time and are often late making them. This will demonstrate to the lender that you can’t be trusted to pay them back should they lend to you. If you find that your loan applications are consistently rejected, then it might be a good idea to check out what your credit rating is and see if it needs boosting.
- Your Credit Card Limit Gets Decreased
When you apply for a credit card, you’re given a limit on how much you can spend. However, if you start to show that you can’t pay it off, the lender may decrease it. As your credit rating gets lower and lower, the lender will notice and even potentially close down your credit card. This is because again, you’re becoming too risky to lend too as they believe you won’t be able to pay them back. If you suspect that your credit limit has been decreased, check through your credit report and see if your score has gone down as well. Most of the time, this will be the reason why and you can then work on increasing it again.
- Debt Collections Contact You
If you’ve missed a few repayments on your loans or credit cards, you may start to be called by debt collection agencies. This will be because not only have you missed the repayments, but you’ve also caused your credit rating to decrease. Your current lenders will then become concerned that you aren’t able to make the repayments and will hand your account over to a collections agency. The agencies job is to help you pay things off, so they may offer you payment plans to bring down your repayments and stop your credit score from being hurt any further.
- Job Rejection
Not all jobs will require a credit check, but some will. Especially when you apply for positions within financial institutions themselves. If you’re finding it hard to get a job like this, request a copy of your credit report and see if your score has gone down. Potential employers will be seeing the same information, so if it doesn’t look good, it can be a cause for concern for them. Hopefully if you can increase your credit rating, then you should notice an influx of interviews and hopefully a position at the company.
- Mortgage/Renting Applications Are Denied
Applying for a mortgage is a lengthy process and it takes a close look at your credit history. A mortgage is essentially a loan that you pay off over time, so your credit rating is extremely important. The broker may advise you that your application has been unsuccessful and explain that it’s because your credit score won’t allow you to take out the higher mortgage that you need. You may think that you only need a good credit score for a mortgage, but this isn’t the case. Renters may also be penalised if they have a bad rating as landlords will often take it into account. When applying, you want your application to demonstrate your ability to be a responsible tenant. However, a low credit score could suggest that you struggle paying things off and the landlord may worry you won’t be able to afford the rent. So, before you apply for a mortgage or a loan, make sure you check your credit rating to decrease your chances of rejection.
Maintaining a perfect credit score is impossible but keeping it on the higher end of the scale is crucial. Applications for loans, mortgages, and even jobs can be impacted by it, so it’s very important that you know where your score is currently sitting. Make sure that you always have an idea of what your credit rating is before you apply for any type of finance. That way you’ll be able to hopefully improve your chances of being approved.
