When you’re attempting to put together a debt management plan, it’s critical to understand your bad credit rating and how it can impact the various credit products that may be available to you. After all, improving your credit score = better interest rates, and a wider choice of debt consolidation products – both of which can go some way toward improving your financial outlook. Which is exactly why we put together this little list of factors that impact your credit score… Your repayment history In an ideal world you would have met all your repayments on time and in full. However not many can lay claim to never having been late in paying a credit card or bill. Unfortunately however, these can all impact your credit history, especially if they reach default stage (e.g. you miss three or more months’ worth of repayments). All of these things can quickly lead to a bad credit rating, especially defaults. The types of accounts you’re using Be wary of what forms of credit you use, as some forms of borrowing can appear as ‘warning signs’ to lenders. These include high-interest products designed for individuals with a bad credit rating. Examples of such products include: Payday loans Logbook loans Credit cards designed for bad credit ratings Doorstep loans The amount of credit you are using and the amount of credit that is available Credit utilisation ratio is extremely influential on your credit score. Credit utilisation ratio is the amount of credit you are using versus your revolving credit limits (e.g. your credit cards and overdrafts). For example, if you have: one overdraft of...
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