Vantage Scores and Fico Scores are the most commonly used credit scores. They typically consider anything less than 630 to be bad. It is estimated that 22 percent of people in America have a credit score that is less than 600. A poor credit score could be thing that stands between you and a loan.
If you Have bad Credit
Every lender has different requirements. However, you may be automatically rejected when you fill out an application if you have bad credit. Some lenders will only help people who have a credit score that is above 695.
If you are able to get approved for a loan, then you can expect to pay much more in interest. You will get high interest rates on things like credit cards and loans. You may also pay more for your auto insurance and home insurance. Additionally, you may be required to make a deposit for your utilities.
You can Boost Your Credit Score
It is easier to ruin credit than it is to improve it. However, there are products that can help you build your credit. For example, you can get a secured credit card. You will have to make a cash deposit, which will be your credit limit. You should keep the balance low and pay the credit card bill on time. Your payment history is the biggest factor that determines your credit score.
You can also take out a credit-builder loan. The funds will be deposited into a savings account. You can access the funds once you pay off the loan. Credit-builder loans are secured by a deposit. Make sure that you select a lender that will report the payments to all of the major credit bureaus.
If you make payments on time, then you should be able to improve your credit score within six months.
Having a bad credit score does not mean that you are a bad person. It simply means that you may have had some unexpected financial trouble. For example, you may have lost your job and fell behind on some of your bill payments. You may also have had some unexpected bills.
However, if you are having a hard time getting a loan or credit card with good interest rates, then it is time to work hard to boost it. Having a good credit score will make your life a lot easier.