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How your Credit Report affects YOU..

Posted by Tamara McDowell on March 19, 2010

If  you want a mortgage, a personal loan, a credit card, a business loan, interest free credit for furniture, or any kind of credit, your credit report usually has to be reasonable.

An impaired credit report can affect your ability to purchase a house, to obtain any new credit cards, to increase limits on existing credit cards, to obtain an overdraft from your bank or most other kinds of credit facilities.

When you start to see early warning signs of debt beginning to become hard to manage..take steps to immediately address your debt problems and protect your credit report. Taking early action will keep your credit report clean and help you in your success when applying for future credit.As soon as you begin to overextend yourself and you find yourself defaulting on payments you are heading to a situation where you are in danger of ruining your credit report.

This will limit the number of credit vehicles available to you. Most banks will not consider a loan and/or issue a credit card. Only the lenders that specialise in lending to higher risk clients will be in a position to lend you money. Those loans will be at above average interest rates to compensate for your perceived higher risk.

These higher rates put you at more risk to default on a loan as your loan will be much more expensive than the average person’s. This illustrates how having a bad credit report can affect you in the long term. It makes it easier for you to get in financial trouble. 

Your credit report is an indicator of your ability to manage money. As well as containing negative information it should also contain positive information about previous credit applications. This information supports any application you make in the future and should help you secure an approval any time you make an application.

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