Bad Credits and Bad Credit Scores

How bad credits relates to bad credit scores

The simple way of having a credit is someone lends you certain things (money or materials) and there is a corresponding interest on such borrowed items, which both of you agreed to how much the payment every month period. Your monthly payments corresponds a score, which will be recorder on your credit report. In simple terms once you pay your monthly obligation on due date then you have good credit scores, if you have some delayed payments then you will be having a low credits scores. If you have consistent low credit scores then it will end up having bad credits records.

What are Bad Credit Score?

Credits scores are numbers generated through special formula used by lending institution to grade your paying ability and will recorder on your credit report. Credit scores are one of the gauges for the lender whether you are good borrower or not. Only the lending firm knows this grading system but mostly it ranges from 400 to 900 points. It was believed that having 700 points above means you are a good borrower while having a core below 600 means you are poor risks aspects for lenders. Bad credits scores will also lead to a bad credit record.

Bad credit scores does not mean you cannot avail a credit anymore but it gives a risk factor in applying for a loan. If you have low credit scores you loans whether it car, mortgage, credit card or money loan, you will have either extra charges or deposit bonds or the worst of all, you will be denied. Because of this situation, having bad credit scores means a waste of money. As lenders protect themselves, they must always refer to credit scores before granting your loan. Credit scores as important as having collateral.  For more info about what is a good credit score, you can check this page.

How would you fix a bad credit score?

Change your attitude the way you handle your finances. Make sure you know how to pay your obligation in time. To erase your bad credits scores, start to borrow from other financial institution a small amount only, which you are very sure to pay. Have a good payment standing on this loan and makes sure you would not exceed on the agreed due date.

Make sure also that you get the less number of months to pay. Say for example, the loan is payable either within 3 months, 6 months, and 12 months period. Choose the 3 months. This is done so that you can have new loan again. The lesser the months the faster you have gain a new good credit scores. Just make sure every time you borrowed, you can really pay it and pay it on time. If you continuously done this within a year or two then, you will be having a new sets of good credit records and those previously the new one will outdate bad records. You will then have a Good credit record rather than the bad credits ones.