Actions That Hurt Your Credit Report Resulting in Loan Denial

A 30-day late payment can cause your credit score to drop significantly, potentially by 100 points or more. A 60-day late payment has a greater negative impact on your credit score. A 90-day late payment is considered a more serious delinquency and will likely cause a more substantial drop in your credit score compared to 30 or 60-day late payments. If a payment remains unpaid for 90 days or more, the creditor may charge-off the account (write it off as a loss) and potentially send it to collections, which can severely damage your credit score and make it difficult to obtain credit in the future. Late payments, regardless of the number of days late, will typically remain on your credit report for seven years from the original delinquency date. Another factor that can negatively impact your credit report is using too much of your available credit. Lenders and creditors generally prefer to see a lower debt to credit ratio (below 30 percent). For instance, if you have a credit limit of $10,000, try to keep usage below $3,000. Also, applying for credit in a lot of places at once is a bad idea. When a lender or creditor accesses your credit reports in response to an application for credit, it results in a “hard inquiry.” Hard inquiries can impact credit scores. Applying for multiple credit accounts in a short time may impact credit scores and cause lenders to view you as a higher-risk borrower. Having too many credit inquiries in a short period can negatively impact your credit score, making it harder to get approved for loans or credit cards. While one or two inquiries might not cause significant damage, multiple inquiries, especially within a short timeframe, can signal to lenders that you’re a risky borrower. Lenders see a high number of inquiries as a sign that you might be struggling to manage your finances or are taking on too much debt. Most people do not realize that closing a credit card account may be problematic to your credit report. It may be tempting to close a credit card account that’s paid in full, but doing so may affect credit scores. Besides impacting your debt to credit utilization ratio, closing the credit card account may also affect the mix of credit accounts on your credit reports. In general, lenders and creditors like to see that you’ve been able to properly handle different types of credit accounts over a period of time. Closing a credit card account you’ve had for a while could also shorten the length of your credit history, which may impact credit scores. AlmalCredit can help to improve your personal credit report and increase your credit scores, so as to get you approved for 0% funding for $100,00 to $150,000 depending on the strength of your personal credit report.