Are You Over Your Head With Your Finances?
| 06:30:00 |
Normally when you apply for a loan or a credit card, your application is readily accepted and there's no problem. It all seems too easy to get credit. In fact, you often hear of cases where people have multiple credit cards or loans and don't appear to have much income to service them. The institutions who lend you the money are happy because they receive a lot of interest from you as you repay the loan. It's a different matter when you are turned down for an application to obtain a loan.
This form of spiraling financial disaster can sometimes lead to bankruptcy and drastic action by creditors in the form of debt collection agencies. Debt collection methods can include seizing goods, cars, and sequestering bank accounts, leaving the debtor with the original debt and no goods. This is never fun.
A credit rating is held by credit rating agencies on every one of us who apply for loans and credit. There are no formulas to calculate your credit rating. Every time you apply for a loan, the lender asks the agency about your credit rating and based on the content of your file, the agency will provide an evaluation report to them about your credit risk.
If you have entries such as default of payments from previous loans or you are and existing bankrupt or a discharged bankrupt, lenders will probably refuse your loan application. Be aware that if you make inquiries about a loan from several lenders at the same time by way of comparison, your credit file will now have several entries in it. The lender may turn you down for a loan because of that. By the same token, while one lender may refuse your application, another lender could just as easily accept it.
It's all about profit, after all.You can apply to see the contents of your credit file for a fee. There are usually several credit rating agencies and a quick Google will often provide you with the contact details for each agency. Check the contents of your file from the report that you receive from them. Inform the agency of any errors so that they can amend your file. I once noticed an entry which was obviously my son's application for a loan and the agency had mistakenly added it to my file. Even if the agency refuses to amend your file, it is your right to have your comments as a "note of correction".
This form of spiraling financial disaster can sometimes lead to bankruptcy and drastic action by creditors in the form of debt collection agencies. Debt collection methods can include seizing goods, cars, and sequestering bank accounts, leaving the debtor with the original debt and no goods. This is never fun.
A credit rating is held by credit rating agencies on every one of us who apply for loans and credit. There are no formulas to calculate your credit rating. Every time you apply for a loan, the lender asks the agency about your credit rating and based on the content of your file, the agency will provide an evaluation report to them about your credit risk.
If you have entries such as default of payments from previous loans or you are and existing bankrupt or a discharged bankrupt, lenders will probably refuse your loan application. Be aware that if you make inquiries about a loan from several lenders at the same time by way of comparison, your credit file will now have several entries in it. The lender may turn you down for a loan because of that. By the same token, while one lender may refuse your application, another lender could just as easily accept it.
It's all about profit, after all.You can apply to see the contents of your credit file for a fee. There are usually several credit rating agencies and a quick Google will often provide you with the contact details for each agency. Check the contents of your file from the report that you receive from them. Inform the agency of any errors so that they can amend your file. I once noticed an entry which was obviously my son's application for a loan and the agency had mistakenly added it to my file. Even if the agency refuses to amend your file, it is your right to have your comments as a "note of correction".
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