What Bad Credit Means for You
Do you remember back in high school how there was a grade scale?
100-90 was an A
90-80 was a B
80-70 was a C
70-60 was a D
Below 50 was an F
Well that’s in many ways like your credit score. It has levels of great, good, fair, and completely bad.
Great Credit: 850-760
Good Credit: 760-680
Fair Credit: 680-620
Bad Credit: Below 620
So in a way you are still being graded, but instead of tests and papers, you’re being graded on how you spend your money. Doesn’t that financial class sound more and more like a good idea to have taken instead of skipping it? Yeah I know it was a boring class! But finding out how to manage your money would have been probably the most useful class to have taken throughout your high school years.
With bad credit there are so many things you can miss out on because you can’t get it or its way too expensive for your budget. Bad credit, much like a bad grade, determines how people perceive you in certain situations. When you had an F in your class you either weren’t allowed to move on to the next grade, forced into summer school or place in special classes to make up for it. You maybe even lost privileges such as playing sports or going on field trips. Bad credit is the same way. You’re left out on all the fun and you have to pay for it throughout your life. New cars are out of your range because the interest rates are too high or you can’t be approved; Insurance companies are unable to approve you or they can’t get you any discounts so the monthly payments are too high; the credit card companies may give you a card with a 20% interest rate or higher causing it to be too expensive to use, or they might threaten to close your account because you’re too much of a high risk. And to buy a car, you’ll have to rely on bad credit loans, which can have pitfalls. Bad credit makes life more complicated and expensive.
Now when you had an A in your classes, your teacher didn’t bother you and probably respected you a little more. You could play sports, go on that field trip and didn’t have to waste your summer in a classroom learning something you’ve already gone over. Parents and teachers trusted you more to make the right decisions when they weren’t looking. They most likely assumed you had integrity and would also be a lot more understanding if you were sick or made a mistake.
Same with good to great credit. Companies can trust you with your money and not have to worry about missed payments or late payments. It gives them the perception of responsibility and that you will take care of whatever you took a loan out on and return it in good condition. And you won’t have to rely on bad credit car loans when you go to buy a car.
When you have bad credit your life will be a lot more complicated. Whether you want to accept this or not, companies will treat you differently.
With good credit you save a lot more money and are given a lot more perks in life. Bad credit closes the doors to so many opportunities in life. You’ll save money for that home you’ve always wanted. You’ll have a lot more financial freedom and won’t have to cut as many corners and struggle from paycheck to paycheck. It will be much easier to save up for a retirement with good credit. The good news is that even if you have bad credit you can fix it. Fix your credit as soon as possible. Start today by ordering a free copy of your credit history from one of the 3 major credit agencies.
Car Loans for Bad Credit Can Help
Start small and pay off what you can afford and slowly work up to the bigger debts. There is a lot of ways to get help as you re-build your credit history. In some cases bad credit auto loans can help you improve your credit too.
Your credit score is one of the best things you can invest in improving and immediately increase the quality of your life. It will prove to companies that you can handle debt responsibly. It will also give you a new found level of self respect and confidence you never thought you had. It’s easy to turn your back on bills and run away. The truth is that failure to pay will follow you throughout your whole life. While it seems like people with bad credit should get lower interest rates because they need more help, it wouldn’t make sense. Unfortunately, a bad credit loan will usually carry a higher interest rate to make up for the higher risk the lender takes.
Credit score has a direct correlation to positive or negative quality of life and stress levels.
If you’re going to do one thing to day to invest in your future start fixing your credit history. It will be one of the very best things you can do.