A bad credit score has messed a lot of people seeking loans. It’s important to note that many lenders will subject your credit score to meticulous scrutiny before issuing you any loan. So, if you have a bad credit score, the chances of securing a loan are slim. Lucky, the information below is going to elaborate on how to improve and maintain your credit score.
Before we look at how to beat a bad credit score, the first step is understanding good/bad credit score. After all, you cannot work on something that you don’t understand. Get knowledgeable about credit score and learn everything you need to know.
A credit score is a 3 digit number that usually ranges from 300 to 850. Usually, this number is based on your credit information—including how promptly you pay your debts. Lenders use the credit report to advance loans to their clients. The credit report helps your lenders determine your financial capability—especially when it comes to repaying their loans.
Understanding the Meaning of a Bad Credit Score
A credit score is measured in for 3 numbers (i.e. from 300 to 850). If yours is below 670, then it’s considered a bad credit score. However, a credit score that falls between 580 and 669 is considered fair. On the other hand, if yours ranges from 300 to 579, it’s considered a poor credit score.
Here is a breakdown of how the credit score is measured:
300-579—this is considered a poor credit score
580-669—this is considered a fair credit score
670-739—this is considered a good credit score
740-779—this is considered to be a very good credit score
800-850—this is considered an exceptional credit score
Effects of a Bad Credit Score
With a bad credit score, you risk missing out on the following credit facilities:
Loan rejection—Banks may deny you loans and other credit facilities—including mortgages, personal loans, and student loans. Other credit facilities you might miss out on include car loans, federal student loans, as well as credit cards.
Rental applications—a bad credit score may also deny you a place to stay. Remember, in most countries, landlords tend to subject tenants to rigorous background checks when it comes to payment history.
Security deposits—you may be required to make a security deposit by utility companies such as gas, electricity, as well as water.
Cell phone contract—it’s important to note that a good number of wireless providers will only take you as their customer after determining your credit record.
Employment—though rare, certain employers will want to know your credit record before absorbing you as their employee.
Improve Your Credit score
Here is how you can improve that credit score of yours:
●Check your score
●Pay all your bills in time
●Pay down debt
Don’t let a bad credit score overwhelm you. Look for a Loan Company that allows bad credit. You can beat the odds and secure loans. Plus, there are several ways of improving your credit score—something that will give you the financial freedom you need. The above information contains everything you should know concerning a bad credit score. From the basics to how you maintain a good credit score—this information will give you back your financial freedom.