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Why Do I have a Bad Credit Rating?
There are many reasons why a person would have bad credit. Some are very obvious and others are not obvious at all.
For starters, if you have never had any credit cards or loans in your name, then you probably have no credit at all. This can actually equate to bad credit, and you will need to start building it up as soon as possible. Once you have a credit card, if you make any payments past the due date, then it is instantly reported to your credit file. Even just one late payment can send your credit rating on a downward path.Â
Also, you may receive many offers in the mail or via the Internet for new credit cards or other credit accounts with promises of lower interest rates than what you are currently paying. While having a lower rate can definitely help you, applying for those offers will most likely show on your credit report as an enquiry and can cause bad credit. What an enquiry does is make creditors wonder why you are suddenly asking for more and more credit, even if it's just because you are replying to offers or simply trying to establish just one account.
Another reason for bad credit is if you happen to go over your credit limit or are consuming every dollar of available credit on the account. This could mean that you are not bringing in enough income to keep it paid down and makes you look risky.
Many people only think credit ratings come from credit cards, and this can be another reason why credit rates can plummet.
Things as simple as everyday utility bills can affect credit. Making those payments late or not at all will mean more black marks on your credit report. You can also default on loans and those will also be reported to your credit file. Anything that requires you to make a monthly payment is something that could put your credit at risk if you are unable to pay it on time.
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