Your credit score rating is used by your potential lender to determine the risk of offering a loan to you. This is an automated rating system and based on your credit file as well as the information you have provided in your application. Understanding how credit score works is important because it’s always used in the evaluation of your loan application. If the lender declines your application because of low credit score, it may be better not to apply again for another loan in the short term. If multiple lenders decline your application it will result in an even lower credit score. The best thing to do if you have a low credit score is to fix it through the help of a credit repair professional or if you really need a home loan, you can apply for a bad credit home loan.
Even though there can be several reasons why you may end up with a bad credit rating, some of the most common are: