A credit score is something that you build up by making purchases on credit cards and borrowing money in general. For example, taking out a bank loan and using a pay-later service are additional contributors to a credit score.
While credit scores are beneficial for making big purchases, like buying a car, for instance, they can also have a negative impact.
There’s a lot of misinformation out there when it comes to what causes bad credit scores. It’s good to know what influences the credit score positively and negatively so that you can make the best out of this for big purchases.
The good influences on credit score
Good influences will help to boost your credit score and allow you to borrow more.
- Changes in income.
- Conducting a soft search.
- Personal information
The bad influences on credit score
Bad influences will likely restrict your ability to borrow money in the future. Where you’re able to, you’re more likely to incur higher interest rates.
- Missed or late repayments.
- Applying too often for credit.
- Maxing out credit.
Being mindful of how you affect your credit score can help to avoid those bad influences that may stop you from borrowing money. This infographic on bad credit car finance is helpful to go into more detail on the importance of a credit score when it comes to financing a big expense like a car.
Being in control of your credit score is crucial at a young age, so make sure to know what’s right and wrong when borrowing money.
The importance of bad credit car finance
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