Understanding the Credit Report

Credit reports differ from individual to individual. However, it is these reports that creditors use to assess whether an individual is credit worthy or not. While others have a blemished credit rating, others have been able to maintain a good credit record. How is it that a bad credit rating appears?


It is as a result of bad credit behavior that one gets a poor credit rating. Bad credit behavior may come about intentionally or unintentionally. Failure to pay for your credit as expected leads to poor credit rating. With each late or missed payment, your creditor is forced to report the lapse to the credit bureau agency. A series of late or missed payments eventually lead to a poor record of payment. While others may miss making timely payments intentionally, others are victims of their circumstances. It could be that one fell sick and could not operate their businesses as usual, one may have been terminated from work and has no pay to service the loan, or one may have been declared disabled and unable to earn a living anymore. The credit agencies do not keep a record as to why the loans were not repaid as agreed thus not giving poor credit with exemptions. A poor record remains a poor record regardless of its trigger.

Good credit behavior is not always a guarantee that you will have a good credit rating. Some may easily reason that just because they never borrowed a loan in their life time, then they have a good credit rating. Well, this is not true. For the fact that you have never borrowed means that your have a non existent credit history. This does not make matters good for you. When you are seeking to find a loan, you will find it difficult to get a loan. Even if you can afford to pay back a big loan amount, the creditor can easily decline the loan offer since you have no borrowing record from before.

If you have borrowed before but are not a frequent borrower, you are also not in a good place either. You may have had one or two debts but they were spaced and you may have taken up small amounts. When you will be in need of a huge loan, the lender will not be ready to risk giving you the huge amounts. Lenders have a graduation curve that they would like to see their clients use. They may not readily let you graduate from a baby loan to a huge long term loan since this may not be an offer that you are prepared for.

If you have a poor credit record, lenders can easily decline your loan. There are online loan offers that give credits to individuals with a bad credit record. However, these are usually costly and may need your use of guarantors who have a good credit rating or collateral for the loan. If you are able to provide the needed, they can provide small loan amounts depending on your financial disposition letting you pay for the loan as you repair your tainted credit history.

Credit report with score