What Is Considered A Bad Credit Score?
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 new credit or loans. 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 an so forth. And a bad credit score not only interferes
with you getting a 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. Getting an apartment. Most landlords do credit checks to see if
potential tenants are financially responsible.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.What is considered a bad credit score? Generally speaking, anything below 620 is
a bad credit score.
You are going to have a very difficult time
getting anyone to lend you money. 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 not good either. Here you are getting into dangerous territory
and will likely pay much higher interest rates, pay higher fees and have lower credit limits.
Some lenders and credit card issuers may even
deny you altogether. How much is your bad credit score costing
you? Example 1 — 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!Example 2 — Home mortgage paid over 30 years: This shows a person with
bad credit is paying a quarter million dollars more than someone with good credit, holy crap! You can see how 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!
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