What is bad credit?
Bad credit is a term used to refer to the state of having a credit score or credit history that is ranked fairly low on any of a number of scales. Bad credit can impact one’s ability to receive loans or certain services, or can result in much higher interest rates when receiving credit. A person’s credit history is kept by a credit bureau, which keeps a collection of everything that person has done that might impact their credit, from other lines of credit they have, to credit score requests, to bankruptcy. The credit bureau then builds a credit score of some sort based on this information, which can be accessed by lending organizations which are considering extending a line of credit to a person. If that person has good credit, the line of credit will likely be extended; if they have bad credit they may have to either suffer through less than ideal terms or else not receive the credit line. Having bad credit can be the result of any number of things. Often a bad credit score is not th
A. Having poor credit is an uncomfortable subject for many. Many people who have bad credit often find themselves in difficult situations financially. But what exactly does it mean to have “bad credit,” “blemished credit,” or “less-than-perfect credit?” Well, it can mean a few things. A person can have bad credit from not paying their credit card bills or monthly mortgage payments on time or missing them altogether. It may be that you shared account(s) with person(s) It may be that you shared an account or two with your spouse who had bad borrowing habits which affected your credit. Or it could be that you’ve gone through a bankruptcy or foreclosure process. It can also mean having a low credit score. Credit scores can range from approximately 300 to 850, though that range may differ depending on which credit reporting bureau is computing the score since each uses different algorithms. Your credit score is affected by numerous things such as whether you pay your bills on time, whether
When people talk about bad credit, what they mean is that they have an unfavorable credit rating or unfavorable items on their credit report that make it difficult and expensive to obtain new credit. Disputing items on a credit report is the fastest way to bounce back from bad credit or bankruptcy.
Any credit score reported by credit bureaus that is lower than 600 implies bad credit. Of course, there is a wide spectrum; it is not the same to apply for a loan with a 600 credit score than with 450. Nevertheless if your credit score is below 600 you need to understand that you need to expect, if approved, not so advantageous terms as you might get if you can show a good credit score and history. Loan Types And Chances To Qualify When it comes to loan approval, the implications of bad credit differ from one type of loan to the other. Generally speaking, unsecured loans are more susceptible to bad credit because there is a higher risk of default and the lender endangers the investment significantly more. Therefore, personal unsecured loans are harder to qualify for if you have bad credit and you will need to reduce the risk in order to boost your chances of approval. Home equity loans and lines of credit, home mortgage loans and those loans that are subsidized by the government or non
