To put simply, bad credit is known as the failed history of a person in terms of paying bills on time. This results in the likelihood of financial institutions assuming that the person will not be able to make timely payments in the future either.
And, this goof-up generally reflects in the form of a low Credit Score. Not just individuals, even companies can have bad credit on the Basis of their past payments and financial situation. For somebody with bad credit, it becomes difficult to take loans at competitive interest rates as they come under the risky prospect.
Most of the people who have borrowed money or got a credit card will have a credit file ready at a significant credit bureau. The required information in these files is generally about the money they owe and if they have paid back on time.
This data is used to calculate a credit score, which is a number that has an objective to establish the creditworthiness of that person.
Talk to our investment specialist
Generally, a Credit Report carries a score Range of 300 to 850. Thus, borrowers that have 579 or lower score are considered to be bad creditors. And, they have more probability of becoming delinquent on their future loans.
Scores that range between 580 and 669 are those of fair creditors. They have less chances of becoming delinquent on loans. However, they may get a loan at a high-interest rate. At last, the ones that have the score mark of 850 are considered good creditors.
If you have fair or bad credit, don’t fret out. There are several ways that you can implement to enhance your credit score. Below-mentioned are a few tips to help you out:
You Might Also Like
Applying For A Credit Card? Here're The Credit Card Eligibility Criteria