Credit Scores: The Good, The Bad And The Ugly

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Your credit score is a reflection of your credit history. Your total credit score takes into account factors such as your payment history. This can include your total debt, the duration of your credit history, your new credit and the types of credit you use. Now this can mean something good, bad or ugly for your credit scores depending on your financial behaviour.  

Credit scores range from 300 to 850 when we look at the good in credit scores. The higher scores are the more positive. A score in excess of 700 is a good score and should give you good access to credit at a preferential interest rate. Above 767 is excellent and shows you to be a very low-risk consumer that institutions would be happy to give credit to. 

Therefore the better your score is it shows your financial responsibility and you’ll appear more reliable to lenders. Because it will indicate that you most probably paid your bills on time and lenders will more likely to trust you to stay on top of your payments. Along with that you’ll be provided with the best interest rate, which could save you money. 

While the bad of credit scores is negative information that’s valid such as late payments, this could cause you to experience financial limitations and obstacles. That can include unsecured loans may be your option. Or suffer the consequences of being subjected to very high interest rates and add-on fees. 

The good news though is that this can simply be improved by ensuring that payments are made on time every single month. Budgeting finances can help you along in improving your credit rating.  

And the ugly of credit scores is having debt settlements, bankruptcies, foreclosures, law suits, wage garnishments or attachments, liens or public judgments against you. These items of public record constitute the most dangerous marks to have on your credit report from a lender’s perspective. 

As these can only be taken off of a credit report after a period of several years and it’s not something that just goes away easily or can even be overlooked. Therefore getting back on the road for your credit score to improve might take time and a whole lot of work and effort on your side. You may suffer the consequences of being totally denied for loans. Although in the meantime dedicating yourself to paying off debts, is a start. 

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