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What Is a Bad Credit Score? This Is What You Need to Know

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About 53% of Americans, which account for more than half the population have been denied loans and rejected for credit cards due to a bad credit score.

(Newswire.net — September 16, 2020) — About 53% of Americans, which account for more than half the population have been denied loans and rejected for credit cards due to a bad credit score. Even more surprising is the fact that only 1% of Americans can boast of a perfect credit score. Question is, what is a bad credit score and why does it matter?

In many ways, your credit score is the gateway to financial security. It opens up opportunities for getting loans with low-interest rates, housing, and in some cases, employment. Your credit score could be the barrier between you, and the lifestyle you desire.

In this post, we’ll guide you through everything you need to know about bad credit scores, and what you can do to improve yours.

What Is a Bad Credit Score?

Bad credit refers to your history of failing to pay bills and the likelihood that you will not make timely payments in the future. Credit score ranges usually vary based on the scoring model used, like FICO and VantageScore or credit bureaus like Experian, and TransUnion.  Most lenders consider the FICO score, though.

Additionally, different card issuers and lenders have their own set guidelines that determine what constitutes a bad credit score. They base their decisions on the amount of risk they are willing to take. Some lenders cater to borrowers with a perfect score, while others specialize in lending to those with bad credit scores.

What Is a Bad Credit Score Number?

What is considered a bad credit score? The FICO credit score is any number between 300 and 850. It’s designed to indicate the level of consumer creditworthiness and their likelihood to pay debt on time. The higher your number is, the higher your creditworthiness is.

Scores from 300 to 579 are poor, and credit applicants may not get approved for loans easily. Scores from 580 to 669 are considered fair, and applicants are considered to be subprime borrowers.

Scores ranging from 670 to 739 are considered good and can easily get approved for most types of loans. Scores from 740 to 299 are very good, and loan applicants are likely to get better than average offers, and can easily qualify for most loans as well.

The exceptional credit scores run from 800 to 850, and these are the most creditworthy of the lot. Anyone in this category is going to get the best rates in the market, with no possible denial.

Vantage Scores are almost similar because they also range from 300 to 840. Anything from 300 to 499 is considered very poor, from 500 to 600 is poor, 601 to 660 is considered a fail, 661 to 780 is considered good, and 781 to 850 is considered excellent. About 61% of Americans have a fair VantageScore.

What Affects a Credit Score?

There are two major factors that affect a credit score, which are payment history and the credit utilization rate. The payment history accounts for 35% of the score and you need to make payments consistently to keep the score up. If you fail to pay on time and take too long to make the payment, your credit score suffers.

FICO also considers the amount of revolving credit you have. This is your credit utilization rate, and it accounts for 30% of your credit score. Beyond these two, the length of your credit history also affects your score, and so does your new credit, and credit mix. 

The length of your credit history accounts for 15% of your score, your new credit accounts for 10%, and your credit mix accounts for 10%.

How Does a Bad Credit Score Affect You?

A low credit score can affect your life in several ways. For starters, with a bad credit score, lenders will view you as a high-risk borrower and will charge you high-interest rates. If you need a mortgage, for instance, with a low credit score, you could end up paying thousands of dollars because of the high-interest rates.

It’s actually not easy to qualify for most loans, especially mortgages since it’s a substantial amount, and a great risk for the lender. Don’t be surprised if most lenders reject your mortgage application if you have bad credit. Beyond this, it may be difficult to get an approval for a cellphone contract or an apartment.

Some employers could also deny you employment, especially in jobs that require financial responsibility, and if you need to put up a business, qualifying for a small business loan won’t be easy either. Obtaining a conventions car loan may not be easy or impossible as well, and you might have to go for other expensive alternatives.

How Can You Improve Your Bad Credit?

Everyone’s situation is different, so you will have to do what will work for your situation. The best part is, even with a low credit score, once you start to make improvements, you can see results in as little as three months. Improving your credit score is relatively easy and you can start by checking your credit score online.

Once you know what your score is, start by paying all your bills on time. Set automatic payments or payment reminders so you can avoid late payments. Pay down all the revolving debts you have, like credit cards, which will decrease your credit utilization rate. If you can, get a secured credit card, get a short-term loan that you can pay back in a short time, or get a credit-builder loan.

What Is a Bad Credit Score? Everything You Need to Know

So, what is a bad credit score? It’s something you need to work on so you can have better financial opportunities. Having a bad credit score can pose certain problems with your personal finances, so it’s important for you to improve it as soon as you can. 

Now that you know everything you need to know about your bad credit score, you have to take the initiative to change it by taking the right steps.

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Bad Credit

Warner Robins GA Credit Repair Finance Score Improvement Service Launched

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New credit repair services have been launched by the expert team at Fresh Start Consumer Services. They work with clients in Warner Robins, GA and the surrounding areas.

New credit repair services have been launched by the expert team at Fresh Start Consumer Services. They work with clients in Warner Robins, GA and the surrounding areas.

Fresh Start Consumer Services has launched a new credit repair service for clients looking to improve their financial future. Interested parties can sign up for credit consultations, in-depth credit analysis, credit recommendations and more.

Full details can be found at: https://freshstartconsumerservices.com/index.html

The newly launched services are designed to ensure clients can repair bad financial credit history, track their improvement campaign in measurable ways, and secure a better future for themselves and their family.

Clients can work with Fresh Start Consumer Services to clean up their past. This is achieved by working with the major credit bureaus and creditors to challenge the negative report items that affect the credit score.

Based in Warner Robins, GA, the expert team at Fresh Start Consumer Services is passionate about helping citizens to improve their credit score to give them more buying power. As a result of this, clients are able to secure more options in life.

The team understands that sometimes bad things happen to good people, and their services are designed to ensure that clients can get the most out of life. They also realize that a bad credit score can harm clients’ quality of life – and can be a difficult situation to get out of.

Fresh Start Consumer Services offer courses in credit repair and restoration, budget management, credit education and purchase assistance. Clients get easy access to their account 24/7 for live status updates on improvements, allowing them to fine-tune the management of their credit score.

Service options include personalized dispute options to fit each clients’ exact credit repair needs, an experienced case analyst and case advisor working personally with them throughout the process, custom dispute letters, and more.

For clients, there are a number of reasons to work with a credit repair specialist. Clients are able to secure significant savings on interest rates, attain better terms on loan products, and get access to the best credit card deals. They also gain access to more housing options.

The team states: “Fresh Start Consumer Services offers a unique combination of services that gives our clients the quality of life they deserve. We specialize in helping our clients achieve qualifying credit and the financial health they desire.”

Full details can be found on the URL above.

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Is it Possible to Trade In a Car Early?

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Yes, early trade-ins are possible when you finance a vehicle. In fact, there’s no set time frame on trading in a car. Most dealers won’t take a trade-in that’s too fresh, though, and it’s best to wait until there’s equity in your vehicle before you try to trade it in.

What’s a Trade-In?

When you trade in a car, you’re essentially selling it to a dealership and financing something else from their lot, without the hassle of selling and buying with separate transactions. There are no hard-and-fast rules about how and where you have to trade in your vehicle.

However, it’s beneficial to shop around and see which dealers can give you the best price, but you shouldn’t just head to a car lot and ask what they’re willing to offer you. When the time comes, there are several steps you may want to take to get ready for the trade-in process, especially if you’re looking to trade in early before you’ve had the chance to close the equity gap.

Trading In Early and Equity

Are Early Trade-Ins Possible When You Finance a Car?When you’re trading in a vehicle soon after you’ve financed it, you’re more likely to be in a negative equity position – owing more on your auto loan than the car is worth.

This is especially true if you financed a new vehicle, or a certified pre-owned car. Newer vehicles depreciate faster than used ones, which have typically already seen their biggest drop in value.

Depreciation is the loss of value over time and it can’t be stopped. It can be slowed, though. The best way to do this is by using a large down payment when you finance. This reduces the amount you have to borrow, and leaves you owing a price closer to what the car might cost after you drive it off the lot. New vehicles typically lose around 10% of their value as soon as they touch the road.

If you don’t have the equity to recoup your investment in a car, you have to make up that difference out of your own pocket. It’s much easier to trade in a vehicle that can pay for itself, but this isn’t always possible when you’re trying to do so early.

Preparing Your Early Trade-In

When you know that you’re starting with a deficit on your trade-in, it’s a good idea to be prepared to get the most you can. Clean the car thoroughly, both inside and out, and make sure to fix any minor damage that may have occurred in the short time since you took out your loan.

Getting the vehicle detailed and fixing major mechanical issues isn’t likely to result in a worthwhile increase to the cash in your pocket, so don’t go overboard. Remember, you want to make as much money on this trade as you can, and it’s probably cheaper for the dealership to fix any large issues.

Before you set foot in a dealer to get your trade-in appraised, it’s a good idea to know approximately how much your car is worth. You can find this out by going to online valuation sites such as Kelley Blue Book or NADAguides. Be sure to be honest when you’re inputting information, since it’s the only way to get an accurate estimate of possible value.

Shopping for Trade-In Values

Once you have the estimates (which you should print or save to your phone), it’s time to take your trade-in to get looked at. Taking it to a few different dealerships is a good way to find the best deal you can.

We recommend taking your early trade-in to at least three different dealers, making sure at least one of them is a franchised dealership that sells your vehicle’s brand. A franchised dealer that sells your car’s brand may be more likely to offer a higher price.

Depending on your credit situation, it’s likely a good idea to ensure you’re trying to trade in your vehicle to a dealership that can work with your situation, especially if you have poor credit. And that’s where Auto Credit Express can come in handy.

We have a nationwide network of special finance dealers that are signed up with subprime lenders who can help people in many different types of credit situations, including bad credit, no credit, and even bankruptcy.

The process is easy to get started – just fill out our free auto loan request form. We’ll match you to a local dealership that can get you started on the financing you need after your early trade-in.

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Jackson receives financial reporting award

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JACKSON, Mich. (WILX) – The City of Jackson is getting international recognition for its transparency in financial reporting.

The Government Finance Officers Association of the United States and Canada (GFOA) awarded the Certificate of Achievement for Excellence in Financial Reporting to Jackson for its Comprehensive Annual Financial Report (CAFR) for the fiscal year ending June 30, 2019.

The CAFR was judged by an impartial panel to meet the high standards of the program. Standards include demonstrating a constructive “spirit of full disclosure” to clearly communicate the financial story of the City and encourage users and groups to read the CAFR. The Certificate of Achievement is the highest form of recognition in the area of governmental accounting and financial reporting.

“This is great for the City as a whole because it improves our bond rating,” said City Manager Jonathan Greene. “We believe this award will help our residents understand the work we do to make the City’s finances transparent and easy to understand.”

Bond Ratings are letter grades assigned to bonds that indicates good or bad credit for an entity like the City of Jackson. By having a strong bond rating cities are granted opportunities to pay back interest at lower rates.

The CAFR can be viewed HERE.

Copyright 2020 WILX. All rights reserved.

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