Bad Credit Warning Signs

Worried your credit is less than stellar but avoiding actually looking into it? The signs that your credit is struggling are easier to identify than you might think. Here are some bad credit warning signs you should be on the lookout for (and what you can do to turn your credit back around again).

You’re Regularly Turned Down for Loans

Getting turned down by your bank (or any other credit lender) for a loan is always an embarrassing experience. If you find it’s happening with a higher frequency than normal? It’s definitely time to take a look at your credit score because that’s a huge red flag and a blatant bad credit warning sign.

Contact Equifax and/or TransUnion and ask to see a copy of your credit report. If your score really is suffering then it won’t be a particularly pleasant exercise but it’s a necessary part of pulling yourself out of a bad credit cycle. It will also give you the opportunity to fix any errors that might be negatively affecting your score.

You Pay Your Bills but You’re Always Late

You do manage to pay your bills, but you never pay them on time. While you might view this as a win, your bank isn’t going to be so pleased. Late payments (especially frequent late payments) have a hugely negative effect on your credit score. This might be a case where it’s worth paying less money back to your bank more often so you’re – at bare minimum – making your monthly minimum payments on time.

You’re Frequently Unable to Make the Minimum Payments

Depending on how often you use (and how much you charge to) your credit card, your minimum payment is going to fluctuate. In an ideal world, you’d be able to pay your entire credit card bill off in one go every time a statement comes in, but that’s not realistic for most people. $500.00 in one go might be too much, but $10.00? That’s a burden that’s not too heavy for the vast majority of credit card holders.

So if you find yourself unable to make the minimum payment, that’s a big flashing warning sign that you’re in financial trouble. It’s time to contact your bank directly, explain the situation, and see if there’s anything they can do to help you get back on track.

You Have to Shuffle Debt Around

If you find that you need to keep pushing your debt around from card to card, you’re in the early stages of what will eventually spiral into a very big problem. There’s only so long you can use one credit card to pay off another credit card before you find yourself in over your head.

You Borrow More Money Than You Make

Do you feel like you’re trapped in an endless cycle where every time you do get paid, it immediately goes right out of your account again to pay off your other bills? Do you notice the interest rates on the money you’ve taken out rising faster than you can stay on top of them?

If you find that you’re relying on your credit card and/or line of credit to survive, you’re spending outside of your means and you need to do everything you can to slam on the brakes immediately. Sit down and come up with a monthly budget for yourself; ask yourself what your necessary expenses are each month (rent/mortgage payments, food, transportation, utilities, etc) and make sure those are your number one priority. Beyond that, try to cut out or cut down on any expenses that are weighing you down and causing you to spend more than you make. Yeah, Netflix and Spotify and a monthly gym membership are great  – so long as they’re not putting you in debt. If they are?  It’s time to cut your losses.

Now that you’ve identified your bad credit warning signs, do you need help getting back on the right track? Fill out our online application right here.