Does Your Bad Credit History Still Haunt You?


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I would love to tell you to put your past behind you but when it comes to credit your past will be reflected on your credit history and your credit report. And that's how bad credit gets started. However, other contributing factors can well have an adverse effect on your credit and you'd best know what they are.

Most of your bad credit problems arise from bad management of your finances. Missing credit card payments, defaulting on your secured loan, declaration of bankruptcy are the primary red light factors that alert lenders to the fact that you are a bad credit risk. The frequency and pattern of such behavior in the financial arena mount up to give an unflattering picture of you in your credit report and will depress your rating.

Some of the other factors that can give you negatives against your credit rating are your marital status and whether you have children. Not much you can change there! It isn't just what you do with your money that comes up on your credit rating - you can have a rating that is less than perfect as far as a lender is concerned regardless of your payment history. But the best thing you can do is to first to make sure that the credit history being shown against your name is accurate. Check the report very carefully and get the errors corrected.

Regardless of how your bad credit rating arose, you look less attractive to lenders when you apply for a loan than someone with a perfect history. Most lenders will do a quick check of your rating when you apply for a loan. A rejection may occur on this first screening. The trouble with that is that each time you make an application, a turn down is recorded every time there is a rejection. The consequence is that your rating suffers accordingly. In view of this you may want to see if you can find lenders who will pre-qualify you without you entering the application process.

One thing in your favor is that a larger number of lenders are prepared to work with you despite bad credit problems in your history. Some firms even specialize in bad credit loans. The corollary is that they charge higher rates and make bigger profits. The international online companies are usually better set up to work in this area than are local banks and credit unions, so select your lenders carefully and don't make an application until you are fairly sure you will be approved for a loan.

You need to be prepared to do your homework well before you finalize on an application. The well known online lenders are set up to allow you to compare rates and costs and are well used to the questions you may have. Some of the brokers make this process even easier with comparison capability built in to their process. Since you have bad credit, you need to be smart in your shopping. Carelessness at this stage will not only cost you dollars and cents but may contribute to making a bad situation even worse. Be diligent and an educated consumer and avoid damaging your credit further by filing too many applications.

Jim Ferris is a seasoned advisor to those with poor to bad credit. When you face difficulty with financing and are looking for lenders who you can go to without fear for mortgages, consolidation loans and other high risk vehicles. You'll find the answers you need given by Jim and his colleagues at


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