Something as fundamental as your score can go wrong making you wonder what on earth happened
A surprising amount of people are not particularly aware of their credit score. It would make sense that the main reason for this is that your credit score is not something you particularly think about – right up until the point it becomes a problem.
When that happens, you can find yourself staring at a computer screen at a three-figure number and wondering what on earth happened.
If you are alarmed by your credit score, take a look at the following issues that may have occurred:Click To Tweet
Don’t Panic
The way that people find out their credit score is poor tends to be because they have an application for credit refused. Not only is this inconvenient – as you cannot obtain the service that you were trying to get – but it can also be downright embarrassing. You find yourself flustered, muttering to the person that ran the check that you have no idea what the problem can be.
If that sounds familiar, or you haven’t checked your credit score in the past 12 months, then you’re probably in for a shock. There’s an alarming amount of ways that something as fundamental as your score can go wrong – through no fault of your own.
Not My Fault! Credit Score Issues Without Personal Blame
If you find a problem with your score, then one of the following issues may have occurred:
- You have run too many credit searches when applying for products. Too many searches can lead to a negative result, even if you passed the individual searches at the time. Annoyingly, no credit reference company identifies the limit at which you’re deemed to have run ‘too many’ – it’s a guessing game. There are plenty of legitimate reasons (such as moving house and establishing new providers for broadband, phone etc.) you could run a number of searches at once.
- There has been a fault – a lender has registered a debt against you by mistake.
- You have not been using much credit. Strangely, if you use your credit too much – that’s a problem. If you don’t use it enough – that’s a problem. The strange ways of credit reference agencies!
If there is a fault and a debt has been assigned to you that you don’t owe, you can argue it. For the others, you are likely to be stuck with a poor score for the next six to 12 months – these things take time to recover.
What’s Life Like With Bad Credit?
If someone has a bad credit score because of something they knew was happening – such as missing credit card payments or accruing debt – then they are probably in financial difficulties. That’s difficult enough to get out of and comes with its own challenges – but it’s not a shock. They knew their score would be bad. It’s a small comfort, but a comfort nonetheless.
If, however, you would generally consider yourself financially healthy and you end up with a bad credit score, then it will really pinch. Suddenly, after years of considering yourself solvent, you’re struggling to convince lenders that you’re responsible with money – all because of those three little numbers.
Having poor credit can impact your life in a variety of ways. It can be difficult to find phone, broadband, auto loans, and obviously credit cards and standard loans. Even when you can, you may be asked to pay a higher APR rate or a deposit. It may become more difficult to obtain home or travel insurance.
Basically: it’s a total pain.
Is Everything Ruled Out, Then?
Your life is not completely on hold until your credit repairs itself. There are plenty of companies that cater to those who find themselves with a credit score on the lower side. For example, you can look at cars for bad credit by running a search, peruse auto loans here, or just talk to your bank and see if there is someone understanding.
So while life may be more difficult, it’s not going to be impossible.
Is There Any Way To Rebuild My Credit Quickly?
Not particularly. There’s no immediate easy fix, which is frustrating, even more so when you have triggered a bad credit score without defaulting on existing payments.
The best advice is to use a small amount of credit every month. Pay it off consistently; never miss a payment; if necessary, schedule a direct debit to ensure the minimum payment is made every month.
Furthermore, try and avoid applying for new credit wherever possible. Too many searches can – as discussed – have a negative impact on your score. So only allow a credit check if it really can’t be avoided.
With that done, the only other thing you can do is give it time.
