What Does Insufficient Credit Rating Mean?

When you want to obtain a loan in able to buy a car, property, attend college or pursue a graduate program, your credit rating is one of the key factors that can affect the approval of your loan application. If the lending company found out that you have an insufficient credit rating, you can be denied for a loan.
What is Insufficient Credit Rating

Your credit file that contains your personal information and your credit affairs which include your previous loans, payment history, legal actions filed against you because of unsettled debts, are collected by Consumer Reporting Agencies. If your credit report shows very little information about your credit transactions, your credit rating is considered insufficient. The status of your credit scoring can make a negative impact on the lender's decision to approve a loan if the following credit facts are barely or are not shown on your record:

  • payment history of debts and bills
  • loans applied in the past and repayment details
  • total amount of money owed
  • types of credits availed and the corresponding credit issuers
  • newly opened credit accounts

How to Establish Good Credit Rating

To avoid insufficient credit scoring, make sure that all of your credit is properly reflected on your report. You can request a credit report from the credit reporting bureaus and see if every credit activity you made is reflected properly. If not, ask them to include it on their files.

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