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Guide to How Credit Reports Affect Getting Loans and Credit

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How does my report affect my ability to get credit?

Because your report is based on your credit history, it has an affect on the types of credit that you may be able to get in the future, as well as your interest rates on credit. Credit scores are considered a measure of credit worthiness, and the credit extended to you will be in line with this notion. Of course, different creditors look at different aspects of your report, so your ability to secure credit will vary.

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Can bad credit hurt my chances of getting a loan?

A bad credit history can make it difficult for you to get car loans, mortgages, or credit cards in the future. Make sure this doesn’t happen to you by getting problems under control as soon as possible. Creditors look for things like timeliness of payments, too much credit, too many credit inquiries and collection items. These things can not only keep you from getting additional credit but could cost you more on your credit accounts. Banks may loan you money at a higher interest rate and credit cards may raise the interest rate they charge you when these things happen. In addition, you may find that the cost for auto or home insurance is higher since many insurers now consider you credit history when providing you with a quote for insurance.

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I have bad credit. Can I get a loan?

Having bad credit does not necessarily mean that you can’t get a loan, it just means that the terms of your loan may not be as favorable as they could be. Many banks offer tiered interest rates to customers based on their credit score. A customer with perfect credit would be offered a lower interest rate than one with bad credit. Depending on the types of bad credit items that appear on your report, you may still be able to find a lender willing to work with you. Banks usually don’t tell you what the different interest rates are for each tier so to find out what rate you could get, you have to go through the application process.

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Can I appeal a loan that was denied?

If you are denied credit, the potential creditor must provide you with reasons for the denial. When this happens, you are entitled to receive a free copy of your credit report and can request one through the credit report agencies. You should take advantage of this and check to make sure that the reason for the denial was not based on inaccuracies. Any inaccuracies that you find should be corrected ASAP. You should be able to get a letter from your creditor indicating that the information is inaccurate that you can take back to the potential creditor and ask them to reconsider their denial. Some may be willing to work with you when they know that information on your report is not correct.

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Can a cosigner help if you have bad credit?

Sometimes bad credit can be overlooked by a lender when you get a cosigner for your loan. Finding someone who is deemed credit worthy by the loan provider may not only help you get the needed funding but could also help you qualify for a lower interest rate. When you have bad credit, this is sometimes a good first step to helping you reestablish your credit history. Just remember this will only help if you make your payments on time. Otherwise you will hurt your own credit as well as that of you cosigner.

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