The stigma of having a bad credit score often convinces individuals that they can never recover from it. While it is true that credit scores can impact the way financial institutions like banks provide you with loans, a bad credit score isn’t permanent.
In fact, you can avail of easy bad credit personal loans from various businesses. Although lending organizations might slightly inflate the interest rate, it will still be reasonable and allow you to address your needs immediately.
Given the impact of credit scores, there are a lot of myths surrounding the topic. Let’s bust them and understand the reality.
Myth 1: Credit Score Depends on your Annual Income
One of the biggest misconceptions about a credit score is that it depends on how much you earn in a financial year. Your credit score only depends on your financial habits, loan durations and outstanding debt. So, whether you make $805 or $500 per week, how you handle your finances will affect your credit score.
Myth 2: Constantly Checking your Credit Score will Impact it
There have been constant rumours that checking your credit score constantly will lower it. However, that is not the case. It is advisable to continually check your credit score so you can keep regular track of it and clear pending debts if you notice that it is lower than before. There could often be forgotten deficits that could negatively impact your credit score.
Myth 3: Choosing to Apply for a New Credit Card Affects Credit Score
You can successfully apply for as many credit cards as you want without worrying about affecting your credit score. The bank checks for your credit score upon receiving your application and use it as a measure to approve it and grant your credit card. You can apply again after a few months if your application is rejected.
Myth 4: A Bad Credit Score is Permanent
This myth is responsible for the widespread apprehension about a bad credit score. To better understand it, let us look at some of the reasons for a bad credit score:
- Late payment of bills
- Defaulting on loans
- Filing for bankruptcy
- Charge-offs to your account
While these may reduce your credit scores and contribute to the reluctance of banks to provide loans, it is not the end of the road. You can boost your credit score and try again through timely payments and awareness about financial spending.
Here are some ways to boost your credit score:
- Settle outstanding bills immediately
- Ask for higher credit limits
- Limit applying for new accounts until you feel you can manage them
- Regularly check your credit reports and report any discrepancies
Alternatively, you can choose to opt for easy bad credit personal loans if you urgently need funds and cannot wait for extended periods.
As financial institutions and banks keep popping up, there will always be ways to get around a bad credit score. However, it is advisable to maintain a respectable credit score to be prepared to take emergency loans without hassle.
Ensure that your financial decisions are impactful in the long run and aid in receiving loans from any bank you want.
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