Your credit score depends on many factors, so it’s important to know what it is. If you are serious about increasing your score and you don’t know these factors, you must increase your personal financial knowledge and find out. Like most things, this looks difficult when you haven’t seen it before, but, in fact, the concept is not as difficult as you think.
At the most basic level, you must understand your position from your lender’s perspective. They actually want to lend money to you. That’s how they make their profits and lives, so they really and really want to lend money to you.
But, they will not make a profit if you default on your loan, will they? If that happens, they will start losing money. So it doesn’t take part in lending money to you if they know you won’t be able to pay it back.
But they don’t know you or your character, so how do they know if you will pay or not? The answer is they use statistics to check you. They have access to your credit history and they can see when you are late payment and how much payment you have experienced. They also know your income and expenses so that they can calculate how much you are able to repay every month.
Of course, they lend money to many people so they cannot judge any individual applies. They have to hire so many people to do this, they will not get profit. So, while there are always exceptions, you should not rely on it. You must ensure that the statistics of each lender have access to show someone who always pays their loans on or before the due date and who never missed payment.
This will be the reason you have a low credit score if you have it. Here you have to make a plan to pay your debt and stick to it. Over time, your score will increase because it becomes clear you have improved your way and is financially responsible.
It doesn’t matter if your low score is also no mistake. Remember, what they have to do is your credit history. So swallow your pride and anger, see your personal financial knowledge, and see to repair your financial damage, no matter how it happens.