Without a doubt, having a credit record could help you out in a lot of ways. However, not having credit is way better than ending up with a negative record. Bad credit is primarily triggered by your failure to pay off your bills for a considerable amount of time. Lenders will definitely grant you a grace period. However, if you still fail to pay off your dues beyond your grace period, you could expect your credit record to be far from being favorable.
A bad credit record will definitely do you more harm than good. It could get in the way of your applications for loans and other funding platforms. Your bad credit record serves as a red flag for most lenders. In general, bad credit brings your loan applicant closer to rejection.
Bad credit is an indicator of negligence. A negative credit report under your name only means one thing – you neglected your responsibility to post timely payments for your loans, credit card bills and other types of debts. If you have been irresponsible in handling your previous loans, any lender would definitely think twice before letting you borrow money again. Lending money to a loan applicant with negative credit increases the risk on the shoulders of the lender. Thus, it is completely logical and understandable for a lender to deny your application for his own protection.
Bad credit signifies poor financial stability. A poor credit rating does not automatically make you an irresponsible or negligent borrower. At times, it could also mean that you are not earning enough to pay off your dues. Probably, you have already borrowed too much and your monthly earnings could no longer keep up. Borrowing more than what you could pay for is definitely not an indicator of financial maturity.
Bad credit highlights untrustworthiness. Lending money is definitely an act of trust. Based on your credit records and background checks, your loan application will be approved if the lender believes you will pay back. Most often, these lenders do not have any personal connection with you. Thus, your credit report and other critical information provide the platform to earn your lender’s trust. Surely, negative credit could make that foundation weak and shaky.
Most lenders shy away from granting loan applications to borrowers with bad credit. Meanwhile, some lending institutions offer bad credit loans to give people a second chance. To save yourself from lots of hassle and inconvenience, take control of your debts, instead of letting them control your life.