Having a bad credit score can be a hindrance: It makes it more difficult to make major purchases, obtain a loan, and get a credit card. But it can also affect other areas of life that have little to do with finances.
So we know that your credit score is important, but what exactly qualifies as a bad credit score? Find out more about what a bad credit score is, what behaviors lead to a poor score, and how you can improve it.
What Is Considered a Bad Credit Score?
Credit scores are defined on a numerical scale — usually between 300 and 850. But what exactly do these numbers mean? What qualifies as a good credit score and a bad credit score? The short answer: It varies.
Each lender sets its own standards and definitions for good and bad credit scores. This means that most people actually have multiple credit scores. However, the two most commonly used scales from FICO (FICO) – Get Report and VantageScore can be used as models for defining “good” and “bad” in a broad sense.
Here’s a general guideline for the quality of your credit score:
- 720 and above: Excellent
- 690-718: Good
- 630-689: Fair
- 300-629: Bad
In short, any number under 630 is generally considered a bad credit score.
What to Expect With a Bad Credit Score
There’s a reason why people work on maintaining good credit. Having a bad credit score can impact your life in a number of ways, both in the financial realm and beyond. Here’s what you can expect if you have a bad credit score.
Rejected Credit Card and Loan Applications
Ultimately, a credit score measures how likely you are to pay back your debts completely and on time. A high credit score shows lenders that you are reliable. When you have a low credit score, you are considered a higher risk borrower. If your credit history is suboptimal, lenders may reject your applications altogether.
Higher Interest Rates
Even if your applications for credit cards and loans are accepted, people with a bad credit score will likely end up paying more than someone with a good credit score. Having a good credit score gives you the leverage to broker better deals with lenders and credit card companies. It shows that you are reliable. People with bad credit scores are riskier for banks, meaning that they will give you a higher interest rate to compensate for the risk. This means you pay more in the long run.
Trouble Buying a Car
Most people take a loan to buy a car. Before a bank provides you with an auto loan, it will check your credit score to determine if it should give you a loan and at what interest rate. If you have bad credit, your auto loan may be denied or come at a higher interest rate. While you may be able to purchase a car from a place that does not check your credit score, your interest rate will be significantly higher.
Difficulty Finding Housing
Most landlords will do a credit check before approving someone for an apartment or rental home. Bad credit can be an indicator that you won’t pay your rent on time, so many landlords will reject applicants with a poor credit history. This is especially true in competitive markets. While some landlords will accept applicants with a bad credit score, they will usually charge a higher security deposit to make up for the risk.
Higher Insurance Premiums
Insurance companies argue that there is a link between poor credit scores and filing a higher number of claims. If an insurance company discovers that you have a bad credit score, it will likely charge you a higher premium — even if you have filed very few claims in the past.
Difficulty Getting Cell Phone Service
No, a bad credit score doesn’t lead to poor reception. But it does make it harder to land a contract with cell phone companies. Since they provide service on a monthly basis, they rely on timely payments to continue operating. If they do a credit check and discover you have bad credit, they will assume that you’re less likely to pay on time or at all. People with bad credit instead may turn to prepaid cell phones.
Difficulty Starting a Business
It’s extremely common to take out a loan before launching a new business, but getting a loan to can be incredibly difficult if you have poor credit. A bad credit score may limit the amount you can borrow or will cause banks to reject you outright. This is the case even if you come to the table with a well-thought out business plan and supporting documentation.
Difficulty Getting Hired
Some employers look into their job applicant’s credit scores as part of the screening or interview process. It isn’t unheard of for potential employers to reject applicants with bad credit scores. Why do employers care about credit score? Investigating the financial histories of potential hires helps employers gauge how the applicant handles finances, how organized they are, and if they are at a higher risk of committing financially motivated crimes like fraud and theft. While not all companies do this, many do, particularly in the financial industry.
Behaviors That Hurt Your Credit Score
A bad credit score can touch every part of your life, but what behaviors lead to getting poor credit in the first place? Avoid these practices if you want to keep your credit score from getting worse.
Making Late Payments
A good portion of your credit score is determined by payment history. If you consistently make late payments for credit cards or loans, this will negatively impact your credit score.
Not Making Payments
While making payments late is not good, not making payments at all is extremely bad for your credit score. This can also lead to a lender charging off.
Being in Collections
Most of the time, before a lender charges you off, they will hire a third party collector to help them obtain the money you owe. Collections agencies can be aggressive and may have unusual tactics, and being in collections is not just bad for your credit score, but can also cause a substantial amount of stress and embarrassment.
When a lender charges you off, it is assuming that you are incapable of paying your bill altogether. This is extremely damaging to your credit score, as it indicates to lenders that you are a high-risk borrower that may not just avoid payments, but will walk away from them completely.
Defaulting on a Loan
Similar to charging off, defaulting on a loan indicates that you will not fulfill your portion of the loan contract and pay back the money owed to the lender. This has an identical impact on your credit score to charging off.
Receiving a Judgment
Judgment means that you avoided paying your bills to the point where the court system needed to step in and force you to pay. Much like defaulting on a loan or charging off, judgments show that you are a high-risk borrower that lenders should be wary of. Unpaid judgments are especially damaging — so if you find yourself receiving a judgment, it’s important to pay it off as soon as possible.
Maxing Out Credit Cards
Another big factor influencing your credit score is your credit utilization and debt ratio. If you have a large credit card balance relative to your credit limit, you are considered a high utilizer. This lowers your score. If you max out a credit card and have a utilization rate of 100%, this can be extremely damaging to your score.
Closing Credit Cards
The length of your credit history is also taken into consideration when calculating your credit score. The longer your credit history, the better opportunity lenders have to determine your trustworthiness as a borrower. Closing credit cards erases them from your credit history, making it look shorter. If there is no annual fee or other expense, keep cards that you no longer use. Also, be wary of closing credit cards that have a balance remaining on them. If you close a credit card without paying off your balance, it will look like you maxed out your credit.
Having Limited Sources of Credit
Having a healthy mix of different credit sources contributes to calculating your credit score. If you only have a credit history that consists of one credit card or one loan, then this could potentially hurt your score. This is a common problem for younger borrowers, particularly those with a limited credit history.
Applying for too Many Things
When you apply for a credit card or a loan, the lender will perform a credit inquiry to evaluate whether it should give you a loan at all and what your interest rate should be. Credit inquiries are taken into account when calculating your credit score. If you apply for several credit cards and loans close together, then you might harm your score.
Much like defaulting on a loan, foreclosing on your home will cause your credit score to drop. Losing your home means that you have trouble making payments. Unfortunately, having a bad credit score will also impact your ability to get a home loan in the future.
Filing for Bankruptcy
Filing for bankruptcy is a serious move that should not be taken lightly. While it can help relieve debts that you can no longer pay, it also obliterates your credit score. According to the Fair Credit Reporting Act, a Chapter 7 bankruptcy will remain on your credit report for 10 years, while a Chapter 13 will remain anywhere between seven to 10 years, depending on your specific scenario. While you can recover your credit from bankruptcy, it will remain a blemish on your report for up to a decade.
Tips for Improving a Bad Credit Score
While a bad credit score can seriously impact your life, no credit score is hopeless. By changing the behaviors that create poor credit and taking proactive steps to improve your credit, you can eventually get to a good place with your score. Use these tips to improve a bad credit score.
Pay Your Bills on Time
Paying on time is essential for maintaining your score. If you struggle to make payments on time, consider setting up automatic payments or a reminder on your phone the day your bill is due. Paying on time doesn’t just apply to credit card and loan payments, but also to your cell phone bill, electricity bill, rent, and other essentials.
Pay Off Debt
If you have outstanding balances on your credit cards, work to pay them off as quickly as possible. Every month that you have debt will impact your credit score. This will also help improve your credit utilization ratio.
Keep Your Balances Low
While it’s important to maintain your credit history, use your credit cards lightly and keep your balance relatively low. Typically, lenders like to see utilization rates at a maximum of 30%. That means that the balance on your credit card should be no greater than 30% of your credit limit. For example, if you have a credit card with a credit limit of $15,000, then you should make sure that your balance on that card never exceeds $4,500.
Keep Your Accounts Open
Even if you don’t intend to use a credit card any longer, simply pay off the balance and keep it in a secure place. Having the account but keeping the card stowed away will help maintain your credit history, without the burden of carrying the old card around in your wallet.
Don’t Apply for New Accounts
While having a good mix of credit sources is desirable, don’t apply for new credit cards or loans. This is especially true if you already have substantial debt. Applying for credit cards or loans will hit your credit with an inquiry, which can be damaging, and having more credit to play with can be harmful if you’re having money management problems and will be tempted to spend.
Track Your Credit Score
If you’re on a mission to turn your bad credit score into a good one, find a way to track your score without doing a hard credit inquiry. This will allow you to track your progress over time and see how your new behaviors are improving your score. Pick a tool that will do a soft credit check and make sure that you are always checking in with the same tool each month. This will ensure consistency since each tool will use different credit bureaus to determine your score. Use annualcreditreport.com to review your credit reports once a year, free.
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Car Subscription Australia: How to Choose a Car Subscription Service
In uncertain times, you might think differently about things. For example, instead of buying and owning a car, there’s a chance you could have recently searched ‘car subscription Australia’, only to be confused at what is out there in the car subscription service space.
That’s understandable – car subscription is a new idea, a new way of thinking about essentially paying to borrow a car long term and being able to swap cars if your circumstances change. Or, if you don’t need a car anymore, to simply return it without having to worry about the fuss of selling the vehicle.
So what is car subscription? How does it work? What type of person would it suit? How long has it existed? Who invented it? These questions will be addressed in this article, where we take a look at the pros and cons of car subscription, and – perhaps importantly for those out there who aren’t quite sure it’s the right solution for them – we’ll look at car subscription vs buying and car subscription vs lease.
What is car subscription?
If you’ve ever paid to watch a movie using your Apple TV or Google Chromecast, this concept will be easy to understand: you pay to borrow the movie instead of buying a DVD from a shop and keeping it at home as a possession, while only watching it every now and then – if that.
With car subscription you simply pay to use a car for a period of time. And the price you pay to subscribe includes all the costs you don’t want to have to deal with when you own a car – servicing, insurance, roadside assistance, registration and depreciation.
Car subscription allows users to subscribe to a car to use – and typically, the best plans offer monthly vehicle use periods, allowing you to either keep the car you have, or return it if you don’t need it. Or, if you need to swap from a city-friendly hatchback to a seven-seat SUV, some subscription services allow you to do that, often at an extra cost.
Are car subscriptions available in all locations? Sadly, not yet. The idea is pretty new to Australia, with a number of services launching in recent years. They include Carly, Carbar, Hello Cars and Blinker (which lots of people think is actually called Blinkers!), and you can find them online or in the app store.
Depending on your location, you might have access to one, some, or all of these services. Simply search ‘car subscription’ plus the name of your city, be it Sydney, Melbourne, Brisbane, Perth or somewhere else, or just type in ‘car subscription near me.’ A lot of these services are in their infancy, so you might not have access to one depending on where you live. Keep that in mind.
Globally, car subscription has been around a while longer. The first service was apparently established in Hawaii about a decade ago. It’s come a long way since then, with luxury car brands now getting in on the action: Volvo has its own plan called Care by Volvo, and that will be launched in Australia in 2021. While in Europe, Jaguar Land Rover has recently launched Pivotal, a subscription service that could allow you to switch between an electric car for urban duties, or an off-roader for adventure times.
Who does car subscription suit?
Essentially, if you’ve thought to yourself: ‘I’d love to be able to drive rather than take public transport,’ then car subscription could be for you.
Further to that notion, it could suit just about anyone who thinks they need a car at some point in their lives. You might be the sort of person who only uses a car occasionally, travelling to friends’ places or back home to the country.
Or you work as a contractor and need to get to an office over a three-month period. Or you’ve got a family SUV and just want something smaller for your grown children to use because they keep stealing your wheels.
Pros and cons of car subscription
The pros are pretty clear: you don’t have to pay a huge lump sum for a depreciating asset, and the costs of ownership are all taken care of. That’s the biggest advantage.
Other ticks for car subscription include the fact you can change cars if your needs or requirements shift. You can also cancel your plan if you don’t need a car anymore. And while you don’t ‘own’ the car you subscribe to, you don’t have to share it with anyone else – which could be a reason you’d choose a subscription service over a car share service like GoGet.
There are a few cons, though. The subscription service mightn’t have the car you want or need at a specific time. You mightn’t be able to access a service at all, based on your location. The costs can be quite high, so you need to make sure you’re actually getting your money’s worth. And there can be rules around letting other people drive the car, too.
Car subscription vs buying & lease – how do they compare?
If you’ve ever bought a car outright, you know you need a wad of cash to get the car in your driveway. That’s not going to suit everyone’s budget.
Likewise, if you’ve financed or leased a car, you need to know you’re going to have guaranteed income to be able to cover the payments for the period of the lease or car loan. Miss payments, and your car could be repossessed, leading to a bad credit rating.
But with car subscription, there’s no huge buy-in cost, and you can get out at any time. That’s part of its appeal – some providers offer no deposit subscription, and there are even some that have a no credit check policy prior to approval. That could be heaven-sent if you’ve got a chequered history with past payments.
Then there are other elements to consider when weighing up a subscription vs buying or a subscription vs lease. Only a car subscription allows you to change cars easily, and some subscription services also offer delivery and collection of your car when you sign up or finish with it.
Plus, if you happen to be in an accident, you’ve got a guaranteed loan car from most subscription providers.
How much does a car subscription cost? What types of cars are available to subscribe to?
That depends on the provider, the terms and conditions, and the type of car you need. Bigger vehicles or more luxurious models will cost you more to subscribe, as they cost more to buy.
To give you an idea, Carbar offers something like a 2016 Kia Cerato sedan for $139 a week. Think you want an SUV instead? Consider a 2019 Mitsubishi ASX or 2018 Subaru Forester for $189 a week. Want seven seats? You could get a 2018 model Toyota Kluger for $229 a week. Got posh tastes (or just want to impress someone?) Maybe a 2019 Jaguar F-Pace could be your go, but it’ll set you back $429 per week.
Just for balance, you might want to check out what Carly has on offer. You could get a 2015 Holden Barina for $133 a week or do your bit for the environment and get a hybrid Hyundai Ioniq 2019 model for $287 per week.
Or maybe you want to subscribe to a car to allow you to drive for Uber or Ola – check the terms and conditions of your subscription contract before just assuming that’s okay! – and a 2018 Toyota Camry for $336/week could be perfect for you.
The above prices are indicative and may not be correct at the time you’re looking for a car, and that’s the thing: prices vary between providers, and so will the stock available to you.
So, you might be desperate for a seven-seat SUV for an upcoming family trip – but you can’t get one. That’s a pretty sizeable downside.
Plus, most subscription services don’t offer you a brand-new car. If you’re after that new car feel and smell, you might not get it – there are near-new models on most of subscription site listings but expect to pay more for a newer car than you would one that’s older.
How many different car subscription services/companies are there in Australia?
There are several reputable subscription providers out there for you to shop between – provided the service is offered in your area. The ones we’ve already mentioned include Carbar, Carly and Hello Cars.
Blinker works a bit differently – you can visit a dealership and see what stock is available, then choose a car and pay as you drive. Other options include Motopool and Popcar.
The subscription plans vary by provider: some require you to pay a joining fee, others don’t; some will deliver and collect your car, others won’t; some offer short-term cancellation, others require up to 30 days’ notice.
You really need to make sure you’re getting the right car and the right subscription plan for you, so make sure you do your research.
Not sure you want to commit to a car subscription? You could try a car sharing service first. Take a look at GoGet, or Car Next Door – both of which are run differently to the ‘regular’ subscription services.
How do you choose the best car subscription service to suit your needs?
First off, consider your location. Search ‘car subscription near me’ or ‘car subscription’ and the name of your town or city to see if you can access a car subscription network. That’s a crucial step.
If you’ve got plenty of options available to you – if you live in Sydney, Melbourne or Brisbane/Gold Coast, this could be you – then it’s simply a matter of seeing what’s available to you. But again, be sure to read the terms and conditions to see what you are – or more importantly, are not – allowed to do with the car while it’s in your possession.
77 hospitals that received $5M to $10M in PPP loans
Hospitals with fewer than 500 employees and medical offices were among the top recipients of Paycheck Protection Program loans from the federal government, according to data released July 6 by the Small Business Administration.
The data only includes companies that received loans of more than $150,000. The White House said that more than 86 percent of the loans were for less than $150,000, so the data reveals just a snapshot of the companies that received funding, according to The New York Times.
The disclosure comes after lawmakers pressed the White House to be more transparent about the loans, established as part of the $2 trillion Coronavirus Aid, Relief Economic Security Act.
The data puts the funding into ranges, with the top amount being $5 million to $10 million and the lower end of the range being $150,000 to $350,000.
Here is a list of the hospitals receiving $5 million to $10 million, by state.
Note: Some states didn’t have hospitals receiving $5 million to $10 million.
South Peninsula Hospital (Homer)
Mount Graham Regional Medical Center (Saffer)
Bakersfield Heart Hospital
Barlow Respiratory Hospital (Los Angeles)
Central Valley Specialty Hospital (Modesto)
Mammoth Hospital Southern Mono Healthcare District (Mammoth Lakes)
Aspen Valley Hospital
Southwest Health System (Cortez)
Spanish Peaks Regional Health Center (Walsenberg)
Wayne Memorial Hospital (Jesup)
Kauai Veterans Memorial Hospital (Waimea)
Kona Community Hospital (Kealakekua)
Buena Vista Regional Medical Center (Storm Lake)
Delaware County Memorial Hospital (Manchester)
Greater Regional Medical Center (Creston)
Mahaska County Hospital (Oskaloosa)
Montgomery County Memorial Hospital(Red Oak)
Bonner General Health and Hospital (Sandpoint)
Crawford Memorial Hospital (Robinson)
Jackson Park Hospital (Chicago)
McDonough District Hospital (Macomb, Ill.)
Roseland Community Hospital (Chicago)
Touchette Regional Hospital (Centreville)
Decatur County Memorial Hospital (Greensburg)
Kansas Medical Center (Andover)
Newman Regional Health (Emporia)
Labette County Medical Center (Parsons)
Harrison Memorial Hospital (Cynthiana)
Abbeville General Hospital
Mount Desert Island Hospital (Bar Harbor)
Dickinson County Healthcare System (Iron Mountain)
Kalkaska Memorial Health
North Ottawa Community Hospital (Grand Haven)
Scheurer Hospital (Pigeon)
Three Rivers Health
Aitkin Community Hospital
Community Memorial Hospital (Cloquet)
LifeCare Medical Center (Roseau)
Tri County Hospital (Carlton)
Welia Health (Mora)
Cass Regional Medical Center (Harrisonville)
John Fitzgibbon Memorial Hospital (Marshall)
Perry County Memorial Hospital (Perryville)
St. Alexius Hospital (St. Louis)
Community Hospital of Anaconda
Sidney Health Center
Kearney Regional Medical Center
Nebraska Orthopedic Hospital (Omaha)
Androscoggin Valley Hospital (Berlin)
Huggins Hospital (Wolfeboro)
Speare Memorial Hospital (Plymouth)
Artesia General Hospital
Gila Regional Medical Center (Silver City)
Nor-Lea Hospital District (Lovington)
Carthage Area Hospital
Chenango Memorial Hospital (Norwich)
Eastern Niagara Hospital (Lockport)
Erie County Medical Center (Buffalo)
The Bellevue Hospital
Van Wert Health
McBride Orthopedic Hospital (Oklahoma City)
Lake District Hospital (Lakeview)
North Bend Medical Center (Bandon)
Santiam Hospital (Stayton)
North Philadelphia Health System
The Fulton County Medical Center (Mcconnellsburg)
Sana Healthcare-Carrollton Regional Medical Center
Copley Hospital (Morristown)
Grays Harbor Community Hospital (Aberdeen)
Prosser Memorial Health
Black River Memorial Hospital (Black River Falls)
Crossing Rivers Health (Prairie Du Chein)
Reedsburg Area Medical Center
The Richland Hospital (Richland Center)
Tomah Memorial Hospital
Pleasant Valley Hospital (Pleasant Point)
Powell Valley Healthcare
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