Impaired Credit
Candlefocus EditorWhen an individual or business reaches an impaired credit status, it usually means that their credit score has dropped considerably and can no longer obtain desirable loan terms. A drop in credit score can be attributed to numerous factors such as an increase in debt or too many open credit lines causing one to be overutilizing credit resources.
Moreover, any individual or business in an impaired credit situation will likely experience restricted access to potential borrowings and increased interest rates on borrowed amounts due to their reduced creditworthiness. Credit lenders are typically unwilling to take on riskier clients with lower credit scores as they are seen as a higher risk for default.
In order to improve an impaired credit state, drastic changes may be necessary. It may involve paying off existing outstanding debts like credit card debt, reducing operational costs, or foregoing certain investments which can help reduce the financial stress. Additionally, it may be beneficial to seek out accredited credit counseling services which can provide insight on how to improve your credit situation.
In conclusion, impaired credit is a term used to refer to an individual or business in a financial situation where their creditworthiness has been significantly damaged over time. An individual or business in this situation may experience limited access to credit and higher interest rates on loaned amounts. As a result, drastic measures may need to be taken to improve their credit standing in order to once again become a more attractive candidate for loaning purposes.