Why Can You Have A Bad Credit Rating?


Every result has a stimulator. Bad credit rating is the result, and it has many stimulators. Everyone has a different cause of degrading in his/her credit score. It is best to know collectively all the reasons that can sponsor a drop in credit score performance.

The hint of the threat helps you create a more durable shield against it.

Closing accounts of unused credit cards

It can sound a bit weird, but it is true. Closing the accounts of even an unused credit card can degrade rating. It is because closing the account shortens the length of the credit history. For anyone, it can be perilous to close the account and cut the length of the credit. As a result, degrade in credit score happens, and that affects for a long time. The long history is always necessary to have a strong credit score.

An error on your credit report that is not in your knowledge

Strange errors happen on credit reports, and they spoil financial lives and careers. The bad thing is that you do not even know that the wrong thing is there on your report. It keeps absorbing your credit rating, and you get to know when finally you get a rejection on some credit card or loan.

It is always advisable to check your report every month to make sure that there is no false information. Mistakes happen, but if you rectify them on time, prevention of something worst in future can be prevented.

Mutual financial commitments with a partner after divorce

Due to ignorance, many people forget dealing with joint financial commitments. Bank account, loan accounts, investments etc. remain on the name of both the partners. But you should know that if one fails to manage finances appropriately, the poor credit situation happens. The bad credit of a person affects the credit score performance of the partner.

Wrong credit mix

Credit mix is a collection of varied types of debts one owes. It contains credit card, mortgage, car loans, personal loans etc.  It is never a wise thing to let any particular type of credit dominate your credit record.  Many credit cards or multiple personal loans or anything like this is nothing but financial suicide. The direct effect shows on your credit rating. Too many short-term loans make you less eligible for long-term loans. This fact is applicable in vice-versa form. In short, excess of everything is bad.


It is one of the stormiest incidents to happen in your financial life. It drags the personal finances towards destruction and credit score, don’t even talk about that. The poor credit rating becomes your identity. Bankruptcy is a significant and robust cause of bad rating, and it also makes the revival difficult. Only a piece of sound financial advice can bring you out from poor rating that happens due to insolvency.

Making multiple applications for mortgage

To have your roof, you need funds. The mortgage is the vital thing for that, but in desperation to get money faster, you apply to many lenders. One reason for this hurry is that people with financial stability are always confident about approval. It is the reality that good income people also get a mortgage with a fair or poor credit score. But overconfidence is a bad thing.

Due to many applications, all the lenders perform a credit check, and that leaves search footprint. The finance companies can see the credit check done by the other one. The applicant looks credit hungry, and rejection happens. This complete scenario is the perfect nutrition for a bad credit situation.


The above causes can spoil your credit score performance, and that will have a destructive effect. It is better if you change things on time for a good reason as prevention is better than cure. Financial affairs are always complicated, and you have to be very sure about every action you take and decision you make.