Causes for Bad Credit in New Zealand

What Causes Bad Credit In New Zealand

Factors that can cause

Bad Credit Scores

Bad credit can happen to anyone; it is not limited to any gender, race, or age. Several things can cause bad credit; some are our own doing, and some are out of our control. Lets look at what are the factors that can cause bad credit and how we can fix it

Five Main Causes of Bad Credit

It is possible that you may have damaged your credit score without even knowing. You might have had trouble getting a car loan or a mortgage due to bad credit. If so, you might have been surprised at the turn down since you always paid your bills on time. If this sounds familiar, keep reading because we will help you figure out what may have caused your bad credit score in the first place.

01 :

Defaulting on loans:

Defaulting on a personal loan is the most damaging thing you can do to your credit score. The exact amount of damage done by a default depends on the type of loan and when it happened, but typically defaults will decrease your score by 100 points or more.

Most Common Cause : The most common cause of a bad credit score is missed payments. If you miss just one payment on a car loan or mortgage, it could cost you up to $1,000 in additional interest over the life of the loan! This means that even if you manage to catch up later on, those missed payments will still have an impact on your finances and could prevent you from getting approved for other loans down the road.

Missed Payment : One missed payment on a loan can cause your score to plummet, so if you’re used to paying all of your bills at the last minute, set up automatic payments to ensure that they get paid on time every month. If you have trouble remembering when your bills are due, set reminders in your smartphone calendar or write down the due dates on a wall calendar in a prominent place in your home.

02 :

Late or Unpaid Credit Card Bills:

This is one of the biggest reasons why your credit score can drop. Credit cards are a form of revolving credit, which means that you have the ability to borrow the same amount again and again. As long as you stay within your limit, you can use a credit card over and over without ever repaying the balance in full (although this is never recommended). If you miss payments on your credit card, it will negatively affect your credit score.

Credit card companies report late payments to the three major consumer credit bureaus (Experian, TransUnion and Equifax), which can have a significant negative impact on your credit score. If you miss multiple payments over several months or years, it could lead to having your account sent to collections, which will cause even more damage to your credit score.

03 :

Late or unpaid utility bills:

Some utility companies allow an individual to continue service even if they have bad credit. However, if you miss a payment, the utility company will report it to the major credit bureaus. This will lower your score and make it more difficult for you to obtain new forms of credit in the future.

A day Makes A Difference :  Even if you pay your bill late by just a day, it will show up as a late payment. Of course, the longer you do this, the worse your score will get. It will take time for your payment history to improve, but if you have a few late payments or defaults on your credit report, don’t despair. Once you start paying on time, FICO gives less weight to past events over time. So if you begin making timely payments now, they’ll count more towards improving your score than those one or two times you were late three years ago.

04 :


Bankruptcies remain on your credit report for seven to 10 years. When you file for bankruptcy, creditors are notified that they may not be paid back anything they’re owed if the court discharges some or all of your debts as part of the bankruptcy proceedings.

05 :

Write offs:

Loan write offs in past will have major impact with your credit score. If you have taken out a loan in the past and due to some difficulties could not pay off in full and has been written off. This will be lodged in your credit file and will affect your credit score in New Zealand

Need Help with Bad Credit Loans ?

Let us help you get bad credit loans in New Zealand. Be our next success story !

Sara @ Personal Loans

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