Are you facing problem in securing a line of credit in spite of making regular bill payments? If yes, then it may be because there are certain items on your credit report, which are making the potential lenders worried. Read through the article to gather knowledge about 5 items that may persuade lenders to not lend you money.

5 Scary items on your credit report

Here are the 5 items that may terrify lenders and make them run away from you:

1. Short sale: Homeowners often go for short sales when they are unable to repay their mortgages through loan modification or refinancing. Most of them assume that short sales won't affect their credit adversely. But this is not true. In a short sale, you're actually settling the debt by paying much less than what you owe. The lender will report the deficit balance on your credit report as "balance owed", which in turn can hurt your score.

2. Multiple loan applications: There is nothing unusual if you take out a credit card in a month. But if you take out 4 credit cards within a month or two, then it implies that you can't manage your finances well. Lenders will surely not like the fact that you’re requesting each person in the city for a plastic card.

3. Continuous minimum payments: Do you make only minimum monthly payments on your card? If yes, then you need to change this habit. Lenders regard the consumers making only minimum payments as risky borrowers. They assume that the consumers are making minimum payments due to financial difficulties. Lenders would obviously don't want to lend money to the consumers who are going through money troubles.

You should try to make more than the minimum payment on your credit cards. It will not make much difference if you make minimum payment once in 3-4 months. For example, if you pay the minimum amount after Christmas, then it is completely understandable. But if you always make minimum payments on the cards, then it will be a red signal for the lenders. They'll think that you don't have the financial resources to make the full payment.

4. Too many credit inquiries: A lot of consumers face serious problems in getting credit cards. These consumers submit applications to numerous credit card companies for increasing the chances of securing credit cards. There have also been instances where the consumers have applied several times in the same company.

Lenders check your credit report each time you apply for a credit card or a loan. So, this means that the credit inquiries will increase as you go on submitting multiple applications to the credit card companies, which in return will hurt your credit score.

A good trick to avoid this problem is to submit all the application within a period of 14 days. This is because the scoring models consider all these inquiries as a single inquiry. However, you can take advantage of this facility only when you're applying for a mortgage or an educational loan.

5. Payday loans: Usually, people take out payday loans when they are in urgent need of money. In most cases, consumers go for these loans when they are laid off or underemployed. The interest rates on payday loans are higher than that of the credit cards. So, these loans are considered riskier than that of the credit cards.

When you take out a payday loan, it gets reported to your credit report. Your debt balance increases due to this loan, which in turn reduces your available credit. This makes a negative impact on your credit score. Lenders will always check your score before approving your loan application. When they come to know that you've low credit score, they may refuse to lend you money.

Finally, you should try your best to avoid co-signing for a loan. The reason is, as a co-signer you're legally responsible for a loan. If the original debtor defaults on the loan, then you'll have to pay it off. Moreover, the delinquent account will get reported on your credit report. This may in turn go against you when you apply for a loan in future.