Numerous individuals in the UK have a poor credit record. What is the cause? Well, there are numerous causes as to a poor credit record. Many people seek to know how to repair their credit record but fail to first ask what causes a poor credit record. This thus leaves them with little clues as to how they can avoid making their credit record poor again. Here are some of the major causes of a poor credit record. Learning this will help you maintain a good record for a long time.
Credit card debt
Credit card debt is one of the leading causes of poor credit records. High credit card delinquency results in poor credit rating. Many individuals do not know how to maintain their credit cards balances at an acceptable range thus a bad report. Don’t just keep spending when you have no idea how you will make timely payments of the balances.
High cost of living
We are living at a time when the cost of living keeps rising. Failure to factor in this may lead you into taking up debts that may soon become impossible to maintain. There is no need to keep credit cards for luxuries. If your cash cannot allow you to have luxuries, quit using credit for luxuries as it will dig you deeper into the debt world.
Late payments on credit automatically result in a poor credit rating. You should be timely in paying your debts. Do this by setting your credit recovery date to one when you have received your pay to avoid late payments. Do not also overlook any payment at any date.
Observing credit limits
You should observe your credit limits and never exceed them. Going overboard means that you may not be able to make all the payments in good time thus resulting in a poor credit. Exceeding your limits will also reflect in your credit report thus leading in a poor record. It also leads to your paying higher monthly fees on the credit.
Your credit past
Your past credit record has a reflection on your future credit record. You should consider your past history and always strive to maintain a good history knowing that it will have a bearing on your future credit history.