BAD CREDIT SCORE
A bad credit score is a term coined by the financial industry indicating that a person is a high credit risk based on the score generated from their credit report. The most commonly used credit score used in the lending industry today is the FICO Score which has a range of 300 to 850.
Any credit score less than 620 is generally considered to be a bad credit score.
To put things in further perspective, according to a 2011 study done by Experian, the average consumer credit score in the US is 687.
What is a Bad Credit Score?
When we talk about credit scores, we are referring to a number used to determine your creditworthiness. Your credit score is generated by a formula based on the information contained in your credit report. The higher your credit score, the lower your risk of defaulting on the loan. The lower your credit score, the more likely you are to default on the loan.
What Does a Bad Credit Score Mean?
A bad credit score means that you are at a very high risk of defaulting on a loan, therefore lenders will protect themselves by giving you high interest rates, high up front fees, or denying your loan altogether. Your access to credit will be minimal at best.
How Can You Fix and Increase a Bad Credit Score?
- Pay your bills on time
- Keep your Credit Utilization rate at 30% or less
- Do not close old accounts
- Limit inquiries to one every 6 months
- Carry a good mix of credit
CreditFirm.net has helped thousands of consumers just like you increase their credit scores. Enroll in our credit repair program for only $49.99 and take your first step toward better credit today.