The Upward Journey Of A Person From Credit Invisibility

Posted by scarletmartin on December 2nd, 2019

For those of you who do not know what credit score is, its layman definition is as follows:

Credit score is a three-digit number that reflects the creditworthiness of a person. It calculated by studying all previous borrowings and repayments of the person, which mentioned in their credit history report. “

A higher number proves higher creditworthiness and lower risk. While a good credit score is welcomed with open arms by all lending sources, a poor one closes doors on your face.

A credit score poses the most significant barrier between you and your loan approval. It is also the most influential factor in the process. An excellent credit score can get you an almost guaranteed approval for your loan.

What is Credit Invisibility?

When you start from the bottom, you do not have a credit history. Or when you have not turned 18 in the UK. On the records of credit bureaus, you are invisible.

Credit invisibility is related to your debit and credit status. If you have been managing within your earned income, you would not have generated any history of credit. Your credit cards, car loans, student loans, and any other form of debt are the ones that build your report.

As reported by Experian in 2018, 5.8 million people in the UK are credit invisible. The agency has very little or no information linked to them.

With no debt or borrowings to mention, the bureaus cannot make an account of your creditworthiness. Unless your repayment behavior reflected through some line of credit, there is no way to decide if you are responsible enough for lending money.

Why is Credit Score Important?

Your credit score holds immense importance in your adult life. Even when you have to apply for a credit card, the bank goes through your income statement and previous borrowings.

It comes as a significant factor during the approval of your credit applications. Having a bad credit score leads to a direct rejection of your loan request with the conventional lenders.

The level of risk associated with lending money to you can only be determined through your credit score. It notifies the banks, direct lenders, and other lending sources about how responsible you were with your borrowings in the past.

Yes, people should not be judged by their past. But your credit history is all that lenders have to ascertain their risk in approving your loan application. Your report is their reference guide and speaks a lot about you. All your dealings with credit in the past are recorded in it.

How can Installment Loans Help?

If you are looking forward to acting upon your credit invisibility, monthly installment loans from direct lenders are the best remedy for you. They offer a no credit check option to cover your credit invisibility.

Look through various lending websites and find a reliable online lender. You can read the reviews and terms to establish reliability. Using their calculator can help you determine how much you can borrow and repay each month.

The application form takes just minutes to complete. After submission, your application is processed, and a quick (almost instant) approval is granted for your loan. The amount is directly credited to your bank account within a few hours.

Once that is done, you have to slowly pay back the loan in small monthly installments over the loan period. Staying on schedule with your repayments adds points to your credit report, and you see numbers going up. You can take a loan for the sole purpose of building credit. You do not have to be in financial trouble to be eligible for borrowing money.

How Bad is Credit Invisibility?

The straight forward answer is- Very.

#1. Your loan applications are downright rejected by traditional sources of lending.

#2. Higher interest rates are offered to you on credit cards and short term loans.

#3. Approvals for getting an apartment might be difficult to obtain.

#4. Many employers do not prefer hiring employees with poor or no credit score.

#5. You will have to pay higher insurance premiums, even for your car.

Therefore, while credit invisibility might not be your fault, you should do something about escaping it. Maintaining a good credit score adds security to your financial and professional future.

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