“Why Do I Have A Poor Credit Rating?”

“Why Do I Have A Poor Credit Rating?”

If you’ve recently been rejected for a loan, mortgage or other financial arrangement, the most likely culprit is your credit rating. Your credit rating or credit score is made up of a wealth of different factors, largely focusing on your ability to pay back money. Contrary to popular belief there is no single rating system that blacklists applicants – however, having a chequered financial past will certainly contribute to your ability to borrow in the future.

What contributes to a poor credit score?
The most common reasons for a poor credit score include late or missed payments on loans and credit cards, as well as bankruptcy, IVAs and CCJs. Making the minimum payment on credit cards can also have an adverse effect on your credit score because in this situation it appears like you are struggling to repay your debts.

To keep your creditors happy and your credit score good, make sure you make repayments on time every month. If you are finding it hard to meet their demands, it can be a good idea to call your creditors and explain rather than missing payments. They often have solutions available that can help.

“What if I’ve never borrowed before?”
One of the real contradictory aspects of gaining credit is that if you’ve never borrowed money before, this doesn’t necessarily make you a shoe-in for that big loan or mortgage. What this will show on your credit history is a short or non-existent credit history. The problem here is that the lender cannot be sure whether or not you can make timely repayments.

Even borrowing small amounts or repaying credit cards in full every month can have an effect on your credit score – and not necessarily a positive one. According to Which? Borrowers like this could find it harder to get new credit than people with large, long-term debts.

To boost your credit score in this situation, you might consider taking on a small but manageable loan, addressing your ability to make regular repayments on a long-term basis.

At Motoloan we offer credit to people with poor credit scores, because we lend it against your vehicle. Though more expensive than a bank loan, this is a cheaper option than the astronomical sums demanded by payday loans companies, but it still enables you to access cash extremely quickly.

Find out how much it would cost you to borrow from Motoloan, using our loans calculator.