3 Things That Hurt Your Credit
Many of our customers do not have a clear understanding of what a credit score is and how it can impact their day to day life for years to come . In a nutshell , a credit score is a basic report that outlines an individual’s financial investments , risks , and repayment of those loans . Many things show up and stay on a credit history, including credit card account openings, mortgages, loans, and even other credit checks. These credit checks, or pulled credit reports, may negatively impact your credit score making you look like a credit seeker, so you need to keep them to a minimum.
If you arelooking for ways toimprove your credit so that you can get a lower carloan interest rate and higher dollar amount, there are some means that you can and should take . However, there are also some things that you shouldavoid. The following are the top 3 things people do that can negatively impact their credit score :
1. Change jobs. Lots people are forced to change jobs due to different circumstances, such as a lay-off or company closure, or downsizing. However , if you are able to minimize the amount of times you change jobs, or you are able to stay in the same industry, you will have a lower credit risk.
Lenders want toknow that their customers have some degree of stability in their jobs so that they can be confident that the person will be able to pay back the loan as long as the borrower continues to earn a steady income. But , if you have a history of many job changes , lenders may wonder how you will pay off a loan or continue to make payments while you’re between jobs. Lenders may also have questions about your income stability and your lifestyle stability that could potentially cause them to wonder if you are a high risk financing client .
Of course, it is possible to get a loan if you change jobs frequently. Simply be prepared to explain your job changes to the lender. You’ll also want to tell the lender your solid plan for being able to pay your payments regularly even in the event of a future job change.
2. Open store credit cards. Store credit cards are great, right? They help you save money on purchases that you make at a store and they offer additional specia l benefits .However , each open credit account that you have, including department store credit cards, can hurt your credit history. A lender’s typical view on multiple open credit card accounts is: the more open accounts you have, the more chances you will fall into debt with those other lenders . As well the interest rate is almost always quite high on store credit cards, and they take a very long time to pay off . You should restrict the number of cards that you have and try and pay them off as quickly as possible.
3. Move residencies. Moving alone will not hurt your credit score . But , if you are trying to improve your credit, then staying in one place for alengthy amount of time can help to prove to potential lenders that you have stability and are responsible . They will also be more likely to trust that you can make regular payments and will be able to contact if they need to reach you after they extend the car loan in Ottawa.
Let our credit specialists give you more information about improving your credit, or to speak with a credit specialist aboutgetting a car loan in Ottawa now .