22.3.18

What Is Bad Credit

At one point last year I went to apply for a credit card and was refused, for a little bit more on my overdraft - refused, a loan - refused.
Thinking immediately that this was due to a bad credit report, something that must have only recently happened as my credit score was checked when I applied to rent my current house, I did that thing of panicking and burying my head in the sand.
The bad score would have been down to one credit card I had applied for and used online, which due to an admin error was never sent to me and paperwork was never sent, so I was unable to know how to pay, when to pay, and who to pay.

I then met my boyfriend and two months after being together we had a discussion about money. I admitted that I was sure my credit score was horribly low and feeling ashamed we checked it online.
He was really supportive, because this is something which can be embarrassing, and as we checked we saw that actually my credit score was really good and was better than most people in my area.

Although it's not important or urgently necessary for me to have a credit card, it was something I wanted to do in case of emergency's. It frustrated me that due to one card and an admin error I was then penalised not only with late payment charges (which were thankfully removed) but also with a bad credit score for a while.
However, even with bad credit you have options.



So what exactly is bad credit?

Bad credit is the result of a past failure in keeping up with credit agreements. This is either not paying on time or not paying at all. And the inability to be approved for credit by other lenders.

You would probably have an idea of whether you have bad credit, especially if you have been missing payments. Another sign is if you have applications turned down, lowered credit limits on current cards or increased interest rates.

There is no universal cut off between a good credit score and a bad credit score, however if your score is around 620 it is generally considered as a bad credit score.
Checking your credit report will help you figure out what's causing your credit score to be low, and will help with guidance on how to fix it and how to improve your future lending options.
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