Many credit score numbers but ever wondered what is considered a bad credit score and if you have bad credit how it can effect your life ?? Ok, Lets discuss it and we can guide you how to get rid of bad credit.
First of all lets discuss what is considered A Bad Credit Score? A bad credit score can wreak havoc in many areas of your life. If you have a bad credit score you aren't likely to qualify for any new credit or any loans like car loan or home loan, personal loan. Even if you don't like using credit cards you will usually need one for things like reserving a hotel room, renting a car, setting up utilities, getting a cell phone account and so forth. And a bad credit score not only interferes with you getting a any kind of loan or a credit card, it can also prevent you from Getting a job. Many employers base their final decision on the applicant's credit report. The status of your credit report gives the employer an idea of how dependable you are likely to be.
Next we can see the example of Getting an apartment. Most landlords do credit checks to see if potential tenants are financially responsible.
Another example can of Getting auto or homeowners insurance. Insurance brokers know that statistically more claims are filed by policy holders who have poor credit. If you have poor credit, you will be charged a higher premium or denied altogether from all kind of loans, because they know that poor credit people can do something wrong to file fake claims.
Now the question is What is considered a bad credit score?
Generally People think that below 500 is bad credit, but Professionaly, anything below 620 is a bad credit score. You are going to have a very difficult time getting anyone to lend you money. Nobody will give you loan or insurance and If you happen to qualify for a loan, your interest rate could be as high as 36%. And on the off-chance you get a credit card, your interest rate will be in the mid to high 20% and you'll most likely be charged a security deposit or high acquisition fee. You will end up paying much more for purchases due to exorbitant interest and unnecessary fees. You may also be charged more for insurance rates and some employers may even deny you a job.
A credit score between 620 and 680 is considered sub-prime; not necessarily bad, but its not good either. Here you are getting into dangerous territory and will likely pay much higher interest rates from all lenders, pay higher fees and have lower credit limits. Some lenders and credit card issuers may even deny you altogether.
So, How much is your bad credit score costing you?
For an instance, Auto loan $30,000 car paid over five years This shows someone with bad credit paying six thousand dollars more than someone with good credit and other Example Would be Home mortgage that is to paid over 30 years, This shows a person with bad credit is paying a quarter million dollars more than someone with good credit,
What the heck ... See these all are the consequences of having a bad credit score negatively impacts your life. Do yourself a huge favor and work on repairing your credit and raising your credit scores; life will become so much better and cheaper for all celebration coming ahead.
Please comment and ask questions if you got any. thanks for reading.