Everything You Need to Know About Credit Checks

Credit checks have become extremely common these days, especially following the economic collapse several years ago, and it’s important that you know what a credit check is and how it can affect your credit score. Credit checks are performed by lenders, borrowers or other entity who may have something to risk or lose should you have poor credit worthiness. The credit check usually contains information about yourself, like your social security number, date of birth, employment history, and will also contain information about your credit history and credit worthiness. The lender or borrower will run a credit check on you to determine the level of risk involved in providing a loan to you.

Some of the most common reasons you be asked to agree to a credit check is when applying for a credit card, loan, or mortgage, buying a car or renting a car. There are numerous other reason, though, that you may be required to have your credit checked and it has started to become more and more common to see phone service providers, electric companies, apartment complexes, and even some employment opportunities require a credit check.

Being Denied After a Credit Check

A truly embarrassing and frustrating result of a credit check is when the credit check results in the lender denying you. This can happen for many reasons, most commonly due to a bad credit score, but could also be because of recent credit turbulence (bankruptcy, foreclosure, repo, ect…) or past problems with similar lenders (e.g. if you’re applying for a credit card and you have a history of late payments or outstanding balances with other credit cards, your credit check may come back declined).

If you’ve been denied credit or a loan due to a credit check, be wary of going to other lenders in an attempt to find one who will approve you. Each time your credit is checked your credit score could go down which would just hinder your chances of being approved even further. You should avoid having your credit checked more than once per year, otherwise it could negatively affect your credit score which is detrimental to getting approved and keeping your interest rates low.

How to Prevent Being Denied After a Credit Check

As you will find in any adult life, credit checks are almost always inevitable and you’re bound to have to deal with them one way or another. Naturally, when facing a credit check, you’ll want to make sure that your credit is pristine, leading to a positive result and an approved credit check. This may be easy if you’ve already built up a perfect credit score and have an all-around good credit history, however, if your credit score is low or you have had issues with your credit in the past, this may be more difficult. So how do you rebuild your credit score and repair past credit mistakes? You can and should certainly make sure to follow the best practices of rebuilding your credit but if you want to repair your credit quickly, the fastest way is to speak with a credit repair expert who can help you dispute negative items on your credit report to have them removed all together.

To learn more about how you can dispute negative items on your credit report and get them removed, resulting in a higher credit score and an increased chance of being approved on your next credit check, contact Credit Absolute for a free consultation.