What does long-term credit extension mean?

Multiple credit extensions are common in the financial industry. Usually when your application for a small loan product is rejected, you will be told that the reason for rejection is long credit extensions. However, most users don’t know what long credit extension means. Below, the editor will explain it in detail.

Multiple credit refers to handling credit business on multiple credit platforms that are connected to credit reporting, such as applying for multiple credit cards, or handling multiple loans from financial institutions that are connected to the central bank’s credit reporting system. The personal credit report shows that there are too many personal credit accounts. For users, long-term credit extension behavior will increase users' liabilities and increase repayment pressure, which will make it difficult and slow to increase the credit card limit, make it impossible to handle installment payments, and even reduce the credit limit. When users apply for loans, long-term borrowing will make financial institutions feel that users are short of funds and will use loans to support loans, which will have a negative impact on loan approval. Moreover, users' personal income is limited. Once some unexpected situations occur, their repayment ability will often decline and they will be unable to repay the loan in full. The final result will be that the user is overdue, and even a chain reaction will occur, and the credit business will be fully overdue, which will in turn affect the user. Adverse effects on credit reporting.

If you want to solve the problem of multiple credit cards, users should control the number of credit cards. For credit cards that are not commonly used, choose to cancel and close the account. Just keep 3-5 credit cards. Retention principles: Do not cancel credit cards that have cooperative business dealings with the card-issuing bank. Do not cancel credit cards that have overdue records and need to improve your credit score. Do not cancel credit cards that are considering applying for a mortgage loan with the bank in the future. . At the same time, users can settle some small-amount loans and postpone loan applications. For example, if you owe money to some small-amount online loan platforms, consider settling it if you can. After settlement, remember to ask for a settlement certificate to be issued. Don't apply for loans frequently, otherwise you will add more query records for loan approval. It is best to postpone applying for loans in the short term.

In short, long credit and overdue behavior are different, but users should still try to avoid it, especially on online loan platforms. Because it is a revolving credit limit, users will be checked for credit every time they apply, and the credit report will be There will be more credit accounts, which will affect the results of future loan applications.