Why is Your Credit Score so Low?
A low credit score can get in the way of things. If a person has a low credit score they may not get approved for things such as a car loan or a mortgage. Father George Rutler knows that people may struggle with their credit and their ability to pay for things on time. There can be several reasons why a person may have a low credit score. Rutler looked at some of the common reasons why a person may have a low credit score.
A person may have made some mistakes on their credit in the past and it may be coming back to haunt them. If they have bills that were not paid or money that was owed on things such as credit cards and not paid this can lead to a low credit score. Not paying these bills can be reported to the credit companies and it can start on the report for seven years. A person should not use their credit cards in this case unless it is an emergency. They should also work hard to pay their bills on time. Late payments can harm the credit score.
Multiple Credit Checks
If a person has several credit checks done in a short time this can cause the score to go down. If they apply for several credit cards or loans then they will be rejected and the credit score will decrease. If a person is putting in a lot of applications they are overextending their ability to pay their credit off. This will make them look like they are seeking too much money and this will harm their credit score.
If a person has several credit cards with high balances or that are maxed out this can harm their credit score. If a person has too much debt on these cards and uses over 30 percent of their credit limit this will cause the credit score to decrease. A person needs to watch their spending habits and make sure they are not using all of their available credit.
A person may have a default judgment against them and they may not even know it. Some things may become public records and there may be some smaller accounts that are in a collection. A person should review their credit report to see what they owe and who they owe this money to.
Father George Rutler knows that it is not uncommon for a credit report to have a mistake on it that will harm the credit score. A person needs to look at their credit report and notify the reporting agency of any mistakes on their credit report so they can be corrected.
These are some reasons why a person may have a low credit score. They may not understand that past decisions can harm them in the present. If a person wants to increase their credit score they should live within their means and make a plan to pay their bills on time as well as pay down debt.