Credit history 101: Reasons why first-timers get rejected all the time
No matter how many times you try to apply with all the banks in the Philippines, if you are not eligible, then there is a high chance your application can be rejected. If ever you are able to pass all the requirements and have the essentials like a landline, at least 3 years of employment, and a minimum income of ₱25,000, then why are you still rejected for a credit line like cards or loans? The answer could be in many things, and one of them could be your credit history.
Did you recently close several savings accounts before applying for a loan?
This is a sure-fire red flag in so many ways. When you close more than one savings account in one week and then later applied for a loan, banks will think that you’re up for bankruptcy. While some may think this move gives you a good credit standing, it actually does not because it lessens your lines of credit or your ability to pay back debt.
Do you miss payments of existing loans or credit cards?
All credit lines have a due date, make an alarm on your phone 1 day before to remind you about them because in some cases, busy people just tend to forget. If this is the reason, banks offer online payments, which allow you to connect your savings account to your credit card.
Are you a minimum payer kind of person?
Another reason for shaking your credit history is by paying only the minimum amount for 3 consecutive months, which is also cue for banks to start calling you constantly to remind you about the debt you need to pay. When banks cannot ask you to pay your credit obligations, they sell your information to a collection agency who may be less tolerant than banks. Whatever collection agencies get from you, becomes their revenue.
Did you lose your credit card and not report the incident RIGHT AWAY?
Anybody can use your credit card because some merchants don’t really ask for an ID. To avoid credit card theft, an optimum amount of cards to carry is 2. When you lose the card, contact the bank hotline right away so that the credit card can be blocked instantly. Make sure to have the numbers saved on your phone.
Did you rack up a large balance on your credit card?
When you’ve racked up a large amount of debt on your credit card and was not able to pay for it, your credit score will instantly drop to give you a bad credit history standing. If you can no longer pay for your debt, there are ways you can control this by applying for a balance transfer, which will allow you to consolidate your debt from different banks into one with a smaller interest rate.
Want to know more about credit score?Read the blog here to know how to improve your credit score.