Problem with credit history... though I have been good!?
A few months back I have been trying to shop around for a decent loan and realised the advertised rate often differs vastly from the actual rate you get after the credit companies make you lodge a formal enquiry (with details & all); various tries as such left me with a trail of record on my credit report - which is now causing me problems as I am considered to have an unstable credit history! I have obtained my credit report and tried to explain each individual entry in my credit applications but nobody is willing to lend me money even though I have never defaulted before! Is there a way to solve this?
Public Comments
- 'Shopping' for a loan will wreak havoc with your credit score, as you have found. Every inquiry drops your score a bit more. However, if you had a decent score to start with, it is unlikely that the inquiries alone would drop your score so much that people would be unwilling to lend to you, so it sounds like you have other issues on your credit score to resolve. Plus, if you are finding that the 'advertised' rates are not available to you, it also sounds like you do not have a good credit history. Having to 'explain' every entry on your credit report does not give a lender good confidence that you will pay them back without having to 'explain' late or missed payments. If the inquiries truly are the only problem, they will drop off, in at most, 2 years. They generally have a less significant impact on your score after 6 months - 1 year. So the answer is, don't apply for another loan until you have checked your credit score on-line and seen that the impact of the inquiries has decreased significantly. And then, talk to the lending institution BEFORE you apply, tell them your credit score from on-line, and they can probably tell you up front about what the interest rate will be, or if you will even be approved for the the loan. In the meantime, continue to make your payments on time and keep your balances low relative to your limits. If you are trying to borrow money to 'pay off' other loans, realize that you are NOT paying off the loans, you are just shifting the debt to another loan, and getting yourself in deeper. Start cutting your expenses and living on less than you make.
