What is a bad credit score?
Your credit score is used by lenders to determine if you are a good candidate to extend credit to. However a low credit score can flag you as a credit risk and may make it difficult to get credit.
If you are offered credit with a bad credit score, you will most likely pay more in fees and charges because you may qualify only for a higher interest rate.
Range of Credit Scores
Credit scores can range from 300 to 850 points depending on the score system. The higher the number the better your credit score.
Each lender determines what it considers a good or bad credit score. However, there have been several general score range breakdowns to give you an idea if you have good or bad credit.
Although variations exist, here is a general credit score breakdown:
Although there is some distinction between a low credit score and a bad credit score, it is important to note that many lenders consider consumers with scores under 620 as credit risks.
Bad credit doesn't have to follow you forever
Job loss, a bad economy or simply the mismanagement of credit can put you in a situation where you have bad credit. However, bad credit does not have to follow you around for the rest of your life.
Most negative notations on your credit report will cease appearing in your credit history after seven years (although some may take longer). With hard work and determination, you can watch your credit score rise.