What is BAD CREDIT and why should I care?

You might be asking yourself, ‘What is BAD CREDIT and why should I care about it?’

The number one reason you should care about your credit score is because lenders use this score to determine if you are a good fit for a lending program. In other words, if you want to borrow money, your credit score shows your credit worthiness to the lender. So, if you want to get approved, and, if you want to get a lower interest rate on your loan, you want GOOD CREDIT!

You can be flagged as a credit risk for a variety reasons, and your credit score will reflect this. Having a BAD CREDIT score can make it difficult to get a loan. However, you can get a loan if you have bad credit or no credit.

If your credit score is low, you will likely pay higher interest rates and possibly other fees associated with your loan to make up for the additional risk the lender is taking on by giving you a loan.

A credit score will range from 300 to 850 points depending on which scoring system you are looking at. The higher the number, the better your credit. A low score indicates you have bad credit.

In general, Credit Score Ranges are:

  • Excellent/very good credit score: 700 to 850
  • Good credit score: 680 to 699 (U.S. Average is a score of 682)
  • Average/OK credit score: 620 to 679
  • Low credit score: 580 to 619
  • Poor credit score: 500 to 579
  • Bad credit score: 300 to 499

While there are difference between the Low, Poor, and Bad credit scores, most lenders consider individuals with a score below 620 to be too risky. With a score below 620, you may find it very difficult to obtain a personal loan.

Bad credit can be difficult to repair, but it is not impossible, and it is well worth the effort to fix it.  There are many reasons why a score can drop such as your ability to pay off debt because job loss, difficulty finding a new job, or mismanagement of bill and poor money tracking skills. It is never to late to turn things around. And with help, you can flip your story upside down and gain the financial freedom you thought was out of reach because of your bad credit.

Monitor and manage your credit score today. Get started right now!


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