Let’s talk about a bad Credit

Having bad credit may seem like it gets in the way of every project in your life. No matter what he tries to keep going, keep pulling him back.

The best way to combat this negativity is to learn what a bad score means in the first place. Once you understand what bad credit really is, it will be much easier for you to improve it.

What is a bad credit score?


There’s a lot to unravel behind those three digits of your credit score. For a bad credit score to be good again, you need to understand how the credit score is calculated. There are five main components that major credit bureaus use to determine your score:

  • Payment history: 35%
  • Credit utilization: 30%
  • Credit age: 15%
  • New applications: 10%
  • Types of credit: 10%

If your credit score is low, there are many decisions that could have taken you there. Maybe you didn’t make your credit card or loan payments. Maybe you used too much of your credit limit and your utilization rate fell above 30%.

Or it could be that you’re new to credit and just haven’t had time to build a score. No matter what’s lowering your score, a bad credit score means lenders see it as less reliable. If lenders don’t trust you to pay them, this means they will give you a higher interest rate or directly refuse to lend to you.

How do you know if your credit score has become so bad?


Well, in general, any score below 650 is considered a poor score. If you are below 600, then you are more than poor and in the «bad credit» range. 300 is the absolutely lowest score.

How will a bad credit score affect my life?

Having a bad credit score can affect every aspect of your life. Here are just a few examples of the kind of havoc it can wreak:

Cover emergency expenses

If you find yourself in a difficult financial situation, you probably don’t have an emergency fund to cover unexpected expenses. But with bad credit, you may also have a hard time using credit to cover emergencies. This means that you may be forced to rely on high-cost and risky loan alternatives, such as payday loans.

Get any type of credit

If your credit is really bad, creditors may not extend you a line of credit at all. This can make it difficult to get credit when you need it or rebuild your poor credit score. In most cases, you will need to make a cash deposit if you want to get a credit card.

Make big purchases

Trying to get a loan for a home or car can be very difficult with a low credit score. Your personal plans to become a car or home owner may be suspended until you can increase your score.

Insurance expenses

You may not relate your credit score to your insurance costs, but bad credit can actually mean paying higher insurance rates in some states.

How can you fix a bad credit score?


The good news about having a bad credit score is that there are many ways to repair it. Start by monitoring your credit, if you haven’t already. Once you’ve established a way to monitor your score, review all the components of your score to see where you’re falling behind:

  • Payments
    • Because you have a low credit score, chances are you haven’t been making payments on time. The best way to improve is to start paying off your debt and make sure you make all your minimum payments by the due date. If you have any accounts that are overdue, you need to make payments to catch up.


  • Credit utilization
    • A Any credit utilization rate above 30% will hurt your credit score. This doesn’t necessarily mean you have to spend less money, although that would help. To keep your usage low, try to pay your bill several times a month.


  • Credit age
    • If your credit age is lowering your score, the best thing you can do is wait and not close any accounts you currently have. It may seem like closing an account is the final step when you’re done paying off a debt, but it can actually hurt your score if you get rid of older accounts.


  • New applications
    • Applying for too many lines of credit in a short period of time can also hurt your score. To repair this, simply refrain from making further applications for credit cards, loans, or other types of credit until your score is where you want it to be.


  • Types of credit
    • With a bad score, you may not be able to do much about this component of your credit. Fortunately, the variety of accounts you own has a relatively low impact on the overall health of your credit. You may want to consider using something like a credit building loan to diversify your variety of credits.

Another thing to keep in mind when examining your credit is how long some negative items will remain on your credit report. There are many things, such as late payments or tax liens, that will remain on your report for up to seven whole years.

How long does it take to go from good credit to bad credit?


The answer to this question depends on the method you use to increase your score and what you are contributing to your poor score. If errors in your credit report are affecting your score, then you may see your score improve over the next 30 days if you use a credit repair service.

On the other hand, if your credit score is low due to the series of late payments, then it will take time and you will make all your payments in time to improve it. This will take longer. In most cases, however, a combination of credit repair and the use of techniques to build credit should start showing results in 6 months to a year.