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Creditors will do credit check

 

In life, nobody likes to be judged. When it comes to loans and credit, credit providers will do a credit check when you apply for loan, for them to make an informed decision about whether or not to lend to you. If you have bad credit you can be sure that they will not always consider helping you out.

 

Need to know more about your credit check?

 

All detail of your credit behaviour gets listed by Credit bureaus. When you open an account or take on credit, your repayment behaviour is taken into account by credit bureaus, whether good or bad.

Your credit score is busy calculating all the time. From your first credit application, it starts evaluating you. Every time you pay your credit on time, it starts adding up, also, every time you pay late it subtracts. By not paying at all, it starts going into the red.

The higher your score, the better the risk for credit providers and lenders, this signals to them that there is a good chance that you will pay without any issues.

A poor or low credit score indicates that the borrower has had a problem settling a loan or debt in the past. Possibly, doing the same in the future, thus reducing your chance of getting approval. Under this circumstance, if you do get the loan, it will be with a not so favourable interest rate or term.

When applying for a loan, all credit providers will check out your credit score. So should you.

There are plenty of ways to find out your credit score. Most credit bureaus will even let you check your score free once a year. You can Sign up at Transunion(ITC), Experian or Compuscan.

With these credit bureaus you have an option:

Sign up and pay a small fee and get your report once-off or monthly.

Get your free credit report once a year. Any one of the listed credit bureaus has these options.

Credit scoring can be complicated, what you need to understand, is that every payment or no payment will reflect. Learning to be responsible with your credit score can set you up to reach your goals.

One of the most important things, you can do to protect your credit health, is to research before applying for a loan, especially if you have bad credit. A low credit score does not necessarily mean that you have no options, but the available credit options will be limited if your credit score is not suitable.