Even if you don’t know much about bad credit, the one thing you do know is it isn’t good! However, having bad credit today doesn’t necessarily have the same negative impact on our lives as it once did. That being said, it’s still much better to have good credit than it is to have a bad rating. So, how can you tell whether your credit score is good or bad and if it is bad, can you improve it?
Here, you’ll discover everything you need to know about bad credit including how you can avoid it in the future.
How to tell if you have bad credit
Due to the fact that different banks and lenders score you in totally different ways, it can be difficult determining exactly what a good and bad credit score is. However, as a general rule, the higher your score, the better your credit rating will be.
A score of 0-279 generally equals a very poor score, while 380-419 equals a fair credit rating and a score of 466 and over equals an excellent credit rating. You can view your own credit score by taking a look at your credit report.
Can you improve it?
If you do find you have a bad credit score, the good news is there are ways to improve it. These include:
- Making payments on time
- Checking for any errors on your report
- Proving you can be a responsible borrower
Making your payments on time every time, will really help to improve your credit rating. You can do this by opening up a bad credit bank account from a company such as Think Money, and setting up regular direct debit payments.
It’s also worth taking a look at your report to see if there are any errors. You could have a different address linked to you for example, or your may still be linked to an ex-partner. So, removing any errors can help to improve your overall rating.
Proving you can be a responsible borrower is also a good idea. So, you could apply for a credit card, spend little amounts and then pay it off early or on time to gradually build up your rating.
To avoid getting into bad credit in the future, you’ll need to ensure you never miss a payment and be mindful over any loans you want to take out. Always ensure you can pay them back comfortably on time.