Your credit history can be negatively impacted by even the smallest of events. Perhaps you made a mistake and purchased a new television with an in-store credit card that you actually could not afford. Perhaps you had a balance left over, no matter how small, on a card that you lost, and you forgot to pay it off. When you do things like this, your credit score goes down and your credit history starts to make you look like a rather poor risk to lenders. Getting a car loan or a mortgage can be difficult.
One of the most important pieces of information that you will need to have in order to get these loans is a pay stub that proves your current monthly wages. Some lenders understand that your credit history could be due to the unfortunate event of losing your job. If you can prove that you once again have full time employment and a steady income, they may take a risk. They will want to see how you performed when you used to have a steady income, before you lost your last job, and they will want to see how much you make.
If you do get loans with bad credit history, you should pay them off as quickly as possible. This can actually improve your credit score. Just like everything negative can drag the score down, all of the positive actions that you take will increase it again. It may never return to being perfect, but you can get it out of the realm of “poor” credit. Take out loans for small items, like televisions or computers that you know you will be able to pay back promptly.
It should be noted that it is often easier to get a loan when you have a bad credit history if the loan is small. You may still find it impossible to get a mortgage for a new home. For this reason, it is important that you build your score back up, giving you access to high-caliber loans.