- Great credit scores range from 760 - 850.
- Good credit scores range from 680 - 760.
- Fair credit scores range from 620 - 680.
- Bad credit scores are anywhere below 620.
Bad Credit Loan Articles and Blog Posts
- Check your credit score. Many people don’t know their credit score, so it is important to find out where you stand so you can mark your progress. You can access a free credit report from each of the 3 major credit bureaus (Equifax, Experian, and TransUnion) each year from AnnualCreditReport.com. You will then know how bad your credit is and work on ways to improve it.
- Make a budget. With bad credit, you may have a problem overspending or paying off your bills. The easiest way to fix this is to look at where your money is currently going, and make a plan to fix it. Decide what your necessities and extra expenditures are, and you can then make a realistic budget to follow.
- Leave old accounts open. If you have bad credit, you may want to close old accounts that you have misused. However, your credit history plays a large role in your credit score. Lenders want to see that you’ve used credit for a long time, and cancelling a card will delete all that history from your report. So, keep those old accounts open even if you’ve misused them!
- Make your payments on time. This is an incredibly important aspect of your credit, accounting for 35% of your credit score. By just making the minimum payments each month, you’ll be able to improve your credit. Plus, you won’t have to worry about extra fees for being late. If you have a hard time remembering, set up payment reminders or automatic transfers!
- Pay off your balances. Although paying off your debt may be hard, it can help you feel much better while at the same time improving your score. The amount of credit you use is a factor in determining your credit score. And the smaller, the better. So, by having balances, you look like you are using more credit. If you just use a small amount of credit each month, your score will go up.
- Diversify your credit mix. If possible, think about getting a mix of revolving and installment credit. Lenders like to see both, so they know you are financially responsible in all aspects of your life. Take a look into small installment loans that you will be able to pay off, such as car loans or student loans.
- Write down everything you spend. By simply keeping a list of what you are buying, you will easily be able to pinpoint the cause of your overspending. Sure, you may go to the grocery store often, but do you really need to go to the mall 3 times a week?
- Create a shopping list. If you get tempted by other things at the store, creating a shopping list is a very easy way to save. You can then stick to buying the things that you actually need.
- Don’t buy big purchases immediately. Wait a little and think before buying a big purchase. Many people buy on impulse. And when it comes to those big items, like flat screen TVs and cars, it is extremely important to deliberate and decide if you actually need it before buying it.
- Look at coupons and discounts before going to the store. Many retailers offer discounts to consumers. If you have a problem with spending too much, check out these offers. It may help you save a lot of money on your everyday necessities.
- Think before taking out a bad credit loan. Bad credit loans may seem like a quick fix to financial woes. If you are taking one out just to spend more, it is a bad idea. These loans have exponentially high interest rates and short times before you have to pay them back. They are only meant to be used for emergencies, so do not even think about taking out a bad credit loan so you can spend more!
- Instead of taking out a bad credit loan, think about using a prepaid debit card or a secured debit card. These will help make sure that you do not spend to your credit limit or overdraw your accounts. With a prepaid debit card, you can take the money directly out of your account. With a secured credit card, you first secure your credit line with a deposit and can then use the card as a normal credit card.
- Open a checking and savings account. These bank accounts will help your child learn how to manage money responsibly. If you are able to, help your child open these accounts. However, having bad credit may make it harder to get approved for an account. If you are unable to, educate your child on credit do’s and don’ts. Help them understand overdraft fees, late payments, and how to use credit. Make sure you Once your child turns 18, they can then open their own bank accounts.
- Have your child get a job. Your child will want to have a steady source of income, so they are able to pay off their credit card balances. Don’t let them get stuck in debt with you! So, encourage them to get a job and save money. They can then learn how to use their checking and savings accounts and pay off their bills.
- Encourage them to create a budget. Determine what their income and expenses are. You can then help them create a plan to stay out of debt. By teaching them to not overspend and use credit cards safely, you can hopefully keep them out of the bad credit cycle! And if you are unable to help them, ask someone with good credit to advise them about their finances.
- See if someone with good credit can co-sign on a loan. Although you may not be able to get the loans you want, having someone with good credit co-sign a loan can ensure that your child gets the money they need. Ask a close friend or family member if they are able to co-sign. If all payments are paid on time, your child will build his or her credit score fast.
- Get a credit card. This one may be easier said than done. Once your child is 18, they can apply for credit cards on their own. With little or no credit needed to get approved, both secured credit cards and student credit cards are great options to build credit. However, if your child is younger than 18, you may not want to add them as an authorized user on your credit card because it will affect their score as well. But, like a loan, you can ask someone with good credit to add your child as an authorized user. Just make sure your child pays on time so it does not lower someone else’s score too!
- Use your credit card to your advantage. If you are spending money on groceries, use a card that offers cash back on money you spend at a grocery store. Some cards offer as much as 3% back on grocery purchases. And if you are eating out, pay for your meal with a card that offers cash back or points when you spend money at a restaurant. For example, the Discover it card currently gives cardholders 5% cash back on restaurant and movie purchases.
- The cheapest and most romantic meals are homemade, and you can wow your significant other with your cooking. If you aren’t the best chef, stick to appetizers or something easy. Even just a cheese plate paired with some wine can be very thoughtful. When it comes to drinks, don’t worry if you can’t afford the most expensive wine or champagne. Buy some cheaper options, and serve it in a carafe. Your date won’t be able to tell the difference.
- If you are worried about your meal seeming too ordinary, there are a lot of little details you can add to turn your home into a romantic scene. For example, sprinkle rose petals on the table or light candles and dim the lights.
Valentine’s Day may not seem complete without flowers, chocolate, and gifts, but there’s no reason to bust your wallet to get these things.
- Know that you don’t have to do it all. If it’s not in your budget, don’t get it. Your significant other will be happy knowing that you did something, even if it is just flowers and a handwritten card.
- Once again, use your credit cards when buying gifts. Know your cash back and rewards programs, and use them to your advantage. You can end up with a lot of points by using a card that offers special rewards promotions.
- Rather than buying chocolates or candy, bake something for your significant other. A batch of heart shaped cookies or brownies can be very touching and extremely inexpensive. And if you do want to buy chocolate or candy, research the best deals before buying.
With bad credit, it can be hard to get approved for loans. Lenders typically focus on your payment history, amounts owed, and how long you have been using credit when deciding your eligibility for a loan. If you have a bad credit score, you know how hard it can be to get approved for the things you need. You may get turned away from loans, denied from credit card applications, and your application to rent properties may be rejected. However, that may be changing.
Small lenders have started to use social media when determining a borrower’s eligibility for a loan. They will look at a potential borrower’s Facebook, Twitter, LinkedIn, and other social media profiles to gauge their trustworthiness. They will then use this information to insure that the potential borrower’s information is valid and that he or she is not a financial risk. Lenders have stated that they look at things such as a borrower’s education, career data, who they are friends with, how they interact with others, and how many followers they have. For example, if you claim to have a job, the lender will check your LinkedIn and Facebook to insure that you have the job and see how long you’ve had it. So you might want to stay away from making viral quitting videos or posting statuses about being fired. Lenders will also look to see if you have professional connections in your field and if you have a good online persona. This practice is currently used by startups that grant smaller loans to businesses and individuals who have no to bad credit. This gives them an opportunity to demonstrate their responsibility in other ways than just their credit score. Following in their footsteps, other lending companies and FICO have acknowledged that they too may start using social media to determine a borrower’s credit score.
So what does this mean for people with bad credit?
This could be a great thing for people with bad credit. In a lot of circumstances, a low credit score is due to debt or a mistake from years past. However, you automatically get denied from getting what you need because of that single number. With social media, you will no longer be judged by your FICO score alone. While you may have been denied or had high interest rates in the past due to bad credit, your online reputation can now help you get the credit you need. By acting professional and responsible online, lenders will think that you are financially responsible. They will give you the loan you need, because there is more to you than a bad credit score. If you are honest about your job and have legitimate connections with others, lenders may see you as a valuable asset, not a financial risk.
So, be careful what you post on social media and you can reap the rewards. Your Facebook, Twitter, LinkedIn and other profiles may help you turn your bad credit around.