What Is A Bad Credit Score? What is considered a bad credit score can vary depending on the credit scoring model used, but ultimately, it comes down to what each lender considers a “bad” credit score. Lenders use your credit score to assess the risk you may pose to them, should they provide you credit, and each lender may consider a different score as a “bad” credit score. When considering the most commonly used credit scoring model, FICO, the scores range from 300 to 850 and are usually categorized in the following ranges:
The credit bureau’s credit report information determines your credit score. While the above ranges can help you get a better idea of where your credit score falls regarding typical risk assessment and credit quality, as stated above, each lender may consider a different score as a “bad” credit score. For example, an auto loan lender may consider a credit score between 300 and 500 as bad, while a mortgage lender will likely consider a credit score between 300 and 650 as bad. What Does a Bad Credit Score Mean for Me? For many people, the subject of credit scores can be a stressful, if not sensitive, topic to discuss, especially if your credit score falls within the range that is typically considered a bad credit score. There are numerous reasons that someone would have a bad credit score, many of which may not have been in your control. But here you are now, with bad credit, and it’s essential to know how it will affect you. First, as you may have already experienced, a lower credit score can lead to being denied by a lender for anything from buying a mattress with a payment plan to a new home mortgage. Being denied credit, a mortgage, or even a job because of poor or bad credit can be stressful and frustrating, but even being approved by a lender while your credit score is low can cost you significantly. With a bad credit score, if a lender does approve you, they will give you a very high-interest rate which can cost you thousands of dollars extra. For instance, a $25,000 5-year car loan at an interest rate of 16% (which could be significantly higher with bad credit) would likely cost you over $6,000 more than if you had decent credit and were able to get the same loan with an interest rate of 8% (which could be significantly lower with a 700+ credit score). A typical home mortgage could cost you an extra $100,000 in interest! What Gives You a Bad Credit Score and What You Can Do to Improve Your Score If you’ve discovered that your credit score falls into the bad credit range, it is helpful to know what may have caused your credit score to drop. You can get this information by reviewing your credit report, including any negative items that negatively impacted your credit score, causing you to have a bad credit score. Many things may give you a bad credit score, a few of which include:
The above are some of the most common issues that lead to a poor or bad credit score, but there are many others. It is essential to review your credit report with a credit consultant to help shine more light on what may have caused your credit score to drop and how you can improve or repair your credit. Thankfully, having a bad credit score is not the end of the world since there are many ways to improve your credit score or repair your credit. Here are a few ways in which you can take control of your credit and work on getting your score back up:
Another option to get out of that bad credit score range quickly is to repair your credit score by disputing negative credit items on your credit report. You can fix your credit manually or through a credit repair company. In many cases, there may be false information or even simple mistakes that can allow the negative times to be disputed and removed from your credit report. Removing these negative items from your credit report will increase your credit score. About CreditRepairEnforcers.com: Get the benefits and experience of a firm that concentrates on helping people with credit problems without paying huge setup fees. Credit Repair Enforcers has successfully removed erroneous, unverifiable, outdated, and inaccurate information from our client’s three credit reports for over 20+ years. We assist with all things credit repair and credit building. We have helped people who need assistance with personal, business, and corporate credit repair and credit building. Credit Repair Enforcers fight for your credit rights!
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