Your credit score is very important factor in your financial life. The banks use the credit score whether its bad or good to decide to offer you the credit card or loan. Some service providers use to calculate if you are required to pay a deposit. Auto lenders acknowledge your credit history when offering your insurance rates.
Moreover it is very important to know that what kind of things can increase or even maintain your good credit score, and you should also have a good knowledge about those all factors which can damage your credit rating and effect on Car Loans Canada. Here are a few reasons.
1- Late Payment
Thirty percent of your credit score is your payment history. Always late payment on your credit card will hurt your credit score. Pay your credit card bills on time to keep your credit score. Read More
When you late your payment these four things happen:
- Your creditor will charge a late fee
- Your interest rate will increase
- The late payment is added to your credit report
- Your credit score may drop
2- Not paying any amount
Completely ignoring your credit card bills is far worse than paying late. Every month you miss a payment by credit card, you’re a month closer to the invoice solution.
3- They have written a bill
If creditors believe you will pay your credit card bills at all, you have in your account. The sentence is one of the worst things for your credit score.
4- An account sent to collections
Users often use credit debt recoveries third parties to attempt to collect payments from you. Users can send credits to your collection accounts before or after charging. A collective state shows that the borrower has arisen to pay and hire another person to do so.
5- Give a loan
Standard credit card-offs. A line indicates that you have not fulfilled their portion of the loan agreement.
6- Filing bankruptcy
Bankruptcy will destroy your credit rating. It is a good idea to look for alternatives, such as consumer credit counseling and bad credit loans for bankruptcy.
7- Locked house
Leaving your due payment will ensure that your lender gives up your property (home, car or anything). Around this late payment will damage your credit score and make it more difficult to approve for future mortgage loans.
8- To receive judgment
Trial shows that not only keep your accounts, but the court must be involved to repay your debts. Meanwhile damaging your credit score is a judgment paid better than a non-payment.
9- Credit card high balance
The second most important part of your credit score is the level of debt measured by using credit. Having a high credit card balance (associated with your credit limit) increases your credit usage and reduces your credit score and you can face bad credit or poor credit.
10- Maximum credit
Maximum Card balance shows the high credit limit usage of 100%. This is less than perfect for your credit score. You should make good balance in your credit usage because creditors will also check your previous credit history. And you will get the car loan for bad credit, house loan for bad credit or any other bad credit loan on the behalf of your credit history.
11- Closing credit cards still has balances
When you close a credit card but that still has a balance, your credit limit of $ 0 while decreasing your balance is maintained. Your credit card seems to have been extended, so drop your score.
12- Closing old credit card
Another part of your credit score, 15%, is the length of your credit history – longer credit history is better. Closing old credit cards, especially older cards, let your credit history appear shorter than it really is.
13- Closing credit card available
If you have multiple credit cards with balances and some with no, then close it without a credit credit usage credit.
14- Application for multiple credit cards or loans
Credit application accounts for 10% of your credit score. Performing multiple credit or loan drive application within a short period of time will cause your credit score to come to an end. Keep the application at a minimum.
15- Only credit card or only have loans
Credit mix is 10% of credit. If you only have one type of credit account, a loan or a credit card, your credit score may be affected. This factor usually comes into play if you do not have a lot of credit information in your credit history.