Credit FAQs: Why Do I Have A Bad Credit Rating?

Posted on by rob

Getting refused a loan, credit card or any other kind of credit (such as a mortgage) can be incredibly frustrating – it may mean you can’t move on to the property ladder, clear other debts, or finance essentials such as a car or repairs and improvements to your home.

So why does this happen? What is it about someone’s credit rating or credit history that makes a bank, lender or credit card company turn round with a flat out ‘no’? As lenders are not legally obligated to tell you why you’ve been refused, it can be a puzzle for anyone – which is why we’ve put together our latest article.

‘Bad’ Credit History

Details on your credit history which lead to a bad credit rating can be numerous. Simple things like not sticking to the terms of your original credit agreement (such as missing or late payments) can affect your ability to borrow – even only paying the minimum amount each month on your credit card could suggest to lenders that you’re struggling with repayments, leading to them refusing to lend to you as they ultimate want to be sure they’ll get their money back.

Of course, major events in your credit rating such as being declared bankrupt or having a County Court Judgement (CCJ) made against you will also have a massive impact on your credit rating and, subsequently, your ability to lend from banks and other lenders.

Non-Existent/Short Credit History

Believe it or not, you don’t have to be bankrupt or suffering with debt to be refused a loan or credit from banks and some money lenders. Particularly if you’re younger, your credit history may be short with little to no record of any borrowing – and some lenders, particularly banks, don’t like this as they can’t see whether or not you’ll be able to pay back your loan. Additionally, if your credit history consists of small payments which were all paid back in full (ie. there’s no evidence of interest being paid) then banks and some lenders will be wary – while they do want to get their money back, they want to see you as an investment.

If you’ve never paid interest on any loan or credit before, then they’re not going to make any money off you – and that can mean a big fat ‘no’ from the bank manager.

Regardless of your credit history and whether you need a bad credit, unsecured or short-term loan, then look no further than our quick and easy loans here at Credit Noble. We can provide a number of short-term unsecured loans, with amounts up to £2500 borrowed over a period of up to 12 months – just use our simple slider on our homepage to find out upfront exactly how much your loan will cost.

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