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Bad Credit? Don't Sweat It

If you have a poor credit score, don't panic. It's a common problem, so you aren't alone. And it certainly doesn't have to be a dark shadow hanging over you. We have the info you need to learn how it's possible to take control of your finances.

 

What Is Bad Credit?

 

If you've ever taken out a loan or used a credit card, you have a credit history. Companies have access to this history, and use it to determine your credit score. This is a three-digit number expressing your ability and likelihood to repay debts. One of the well-known companies that evaluates credit is the Fair Isaac Corporation, which uses the FICO system to allocate you a score between 300 and 850. A score of 670 or more is considered good, while a score below 579 is considered bad.

 

Why Is Bad Credit a Problem?

 

If you have a good credit score, companies are more likely to extend credit to you, and may even offer favorable interest rates. If you have bad credit, companies are less likely to give you credit, or may offer higher interest rates to offset the perceived risk. It's important to note that having no credit history is also a bad thing. With no evidence to say whether or not you're going to meet your obligations, companies are likely to assume the worst and take the necessary steps to minimize risk in extending you credit.

 

What Can You Do If You Have Bad Credit?

 

Improving your credit score takes a real commitment. It doesn't happen overnight, so take action as soon as possible. Here are some simple steps to get started:

 

  • Focus on FICO: You actually have more than one credit score, but FICO is the most commonly used method of evaluating credit. Thanks to the FICO Score Open Access Program, many companies now offer a free and easy way for you to check your current FICO score, so you have a baseline to work from.
  • Pay bills on time: Late payments are damaging to your credit score, so make sure you pay all of your bills by their due dates.
  • Pay down debt: Make an effort to pay down all of your existing debts.
  • Limit credit card use: If you have more than one credit card, consolidate the balances and only use one card in the future. Owing an amount on one card is better than owing the same amount across several cards.

 

Need a Loan Now?

 

Even if you get your finances in order, problem items like collections on your credit report stay there for seven years (or longer in the case of bankruptcy), so they continue to have a negative impact. So what's the solution if you really need some extra money while you're getting your accounts in order?

 

At CreditBox, it's possible to get a loan to cover expenses while you build credit. CreditBox can work with you to get a loan even if you don’t have the best credit. Take control of your financial future with a CreditBox loan and using it to better your credit score. Apply today!

 

Sources:

https://www.bankrate.com/finance/debt/7-simple-ways-improve-credit-score-1.aspx

https://www.investopedia.com/terms/b/bad-credit.asp

https://www.experian.com/blogs/ask-experian/what-is-the-average-credit-score-in-the-u-s/

https://www.credit.com/credit-repair/how-long-do-things-stay-on-your-credit-report/

https://www.experian.com/blogs/ask-experian/infographic-what-are-the-different-scoring-ranges/

https://www.fico.com/en/products/fico-score-open-access

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