Little known mistakes that cause bad credit scores

Little known mistakes that cause bad credit scores

Of course I have written much about people with bad credit scores – how they can obtain loans and the ideal loans for them. I always provide a lot of money saving tips and steps that could assist people with bad credit scores in obtaining loans.

It is true that people with bad credit scores are often rejected by some banks and loan lenders when they try to seek loans. Irrespective of that, people with bad credit scores can still secure certain types of alternative loans.


There are several kinds of loan that exist particularly for those affected by bad credit scores and those with no credit history. You can obtain a loan of any amount, at a reasonable rate by considering alternatives such as provident loans.

Although there is a solution for those affected by bad credit scores, that does not mean there is any reason why you should have a bad credit score. In fact to save a lot of people from such a situation, I have included in this article some of the mistakes people do without knowing they could be insidious to their credit report. I advise you to stay glued to your device until you are through with reading this article and these money saving tips if you are at all concerned about your credit score and how it can affect the amount of future borrowing you can obtain and, just as importantly, the cost to you of any borrowings.

  1. Missing some payments

The candid fact about having bad credit scores is that few people are aware of the causes; some of the causes may seem so insignificant or irrelevant. Among the causes of bad credit scores is missing payments on your existing loans or credit cards. Missing payments is so harmful and should be avoided at all costs. Although when you think about it it’s obvious that missing payments can end up in someone’s credit report, and you don’t need to be an expert to realise it will affect your credit score. Yet many people are careless with their payments and miss them not becasue they can’t afford them but because they didn’t get to the bank before closing or they didn’t transfer enough money from one account to another before the payment was due.

Your credit scores are determined by your credit history; how you managed your past credit obligations. Going through your credit history is a sure way to predict the likelihood of you missing payments in the future. Another truth is that missing payments can hurt your credit score in several ways such as:

  • How often you make late payments.
  • How recent your last late payment was.
  • How severe your late payments are.


  1. Settling with your lender

In the consumer credit industry, settling is a term used, which means accepting and paying less than the amount of money you owe on an account. For instance, you owe a credit card company $5,000, when they notice you are unable to pay off the whole amount, they will probably make a deal that you pay less than what you owe. The truth is that you will be happy because you didn’t make the full payment, but the truth is that you settled to pay an amount which is less than what you owe them contractually. Your lender on the other hand will give details of the loan and the amount you settled for to the credit bureaus as a negative item and they will see the remaining balance as a deficiency balance; you don’t need to be told what that will result in: bad credit scores for anyone who goes down this route.

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