What causes negative or bad credit history?

Irregular Payment
  1. Irregular Payment history: Inconsistent, missed, or irregular payment history on your past loans and credit cards would impact your score
  2. Write-offs and Settlements: Any reports by lender (banks / financial institutions) against your name stating written off or previously settled facilities, are likely to raise the risk perception and cause a negative impression.
  3. High Current Balances: The sum of current loan / borrowing balances outstanding in your name also determines how much of your income is likely to be used up to pay off loans. If there is a high amount of current balances, then it is likely that lenders may consider you to be already high on borrowings.
  4. High number of Enquiries: If you have applied for a number of loans in the recent past, the chances of your new loan getting approved is likely to suffer. Simply put, this credit behaviour indicates that you are "Credit Hungry" and in urgent need of money. It is likely to make lenders more cautious while evaluating your credit application.