Loans for people with bad credit

Having bad credit means having a low credit score. Understanding your credit score can sometimes be confusing, especially when your credit worthiness is lacking. Credit bureaus do not arbitrarily pull your credit score out of a hat. There is a formula they use to come up with the number.

This formula is based on several things including: your total outstanding debt and your past payment history. Every time you make a late payment or skip a payment altogether, your credit score is affected in a negative way. Even when you pay a bill just a few days late, it goes against you.

If you have a relatively short credit history and a large amount of debt, your credit score will be lower even if you’ve never had a single late payment.

Regardless of the length of your credit history, if you apply several different credit cards all at the same time it will negatively affect your credit score.

Not every creditor is the same, but as a rule any credit score lower than 650 is one that could use improvement. It is still possible to get a credit card or loan but you can expect the interest rate to be considerably higher than if you had a good credit score.

Filed under: Advice, Bad credit by MerryS