What exactly is Bad Credit? Bad credit results from the failure of the card holder to keep to the credit agreements, especially fee payments and her inability to get to receive a new credit line.
As you use your credit cards, your credit account history is analyzed and documented into credit report by the bureaus. A card holder could have his account sent to a collection agency or charged high balances. Some other times, he may file for bankruptcy or have his nice vehicle repossessed. This is a red flag. Bad credit usually occurs when these things happen several times rather than just a single time. Accumulating plenty negative reports on your credit report will result to bad credit.
Lower Credit Card scores of 300 to 850 generally indicate bad credit.
How Do You Know That You Have a Bad Credit?
As a responsible card card holder, it is your duty to monitor and know when you have fallen into the pit of Bad Credit. You have a bad credit when you start experiencing the following:
- You missed or defaulted payments or have large big credit card balances.
- You have had your credit applications rejected or turned down.
- You have had your interest rates have increased and
- Your issuer has unilaterally lowered your credit limits.
It is advisable that you frequently check your credit score to know if you have slipped into baaaaad credit. You ultimately have a bad credit if your credit score is below 620.
Implications of Bad Credit
Take it from me friends, bad credit is bad. When you have bad credit, the following will be the cases:
- You will will find it difficult to secure loans or lines of credit from your lenders because you may not be able to pay back on any credit card or loan you’re provided with.
- Your applications for credit could will be turned down.
- If and when you eventually succeed in getting approved, you will be slammed with a huge interest rate. This is much more than you will get if you had a good credit score.
- You will loose your insurance ratings because insurance companies use a form of your credit score to give you an insurance rate.
- If you have bad credit, Landlords may require high security deposit from you to secure a house.
How to Recover From Bad Credits
It is worthy to note that bad credit should not last forever. There are things you can do to improve your credit card score. Some of the things you can do include:
- Try and remove bad information from your credit report using credit repair technique and/ or credit card report dispute technique.
- Add positive information to your credit report by adding new accounts.
- Ensure that you make your payments of fees, timely.
In conclusion, Bad credit usually occurs when these things happen several times rather than just a single time. Accumulating plenty negative reports on your credit report will result to bad credit. Therefore, we must ensure that we improve our credit ratings in other to lead a financially stress-free life.
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