What Is a Bad Credit Score and How to Make It Better?

what is a bad credit score?

What is a bad credit score and how can you get it fixed so that it doesn´t mess up your life? The truth is that it isn´t as difficult as you might think.

We all need a good credit score in order to be able to get loans, while in some places it is also necessary to do basic stuff like get a job or buy bread.

Actually, you don´t need a good credit score to buy bread it´s good to see that you are paying attention.

What Is Credit and What Is a Credit Score?

To start with we need to ask what is credit in the first place. Ok, so basically credit is when someone loans you money with the idea that you will pay it back over time.

This is very nice of them but how do they know that you will pay it back and won´t just shrug your shoulders and say, “what money?”in the future?

This is where the credit score comes in, as it shows to the world how credit-worthy you are. The following video explains what this is all about.

This leads us on very nicely to the question of what is a bad credit score. This doesn´t necessarily mean that you have to owe millions or have had a string of financial disasters.

Your credit score takes into account the amount of credit you have, how well you pay it back each month and other aspects of your financial life.

You can find out what your current credit score is like by ordering a copy. There are different ways of doing this in different countries but this YouTube video will get you off on the right foot.

 

Debt Restructuring and Other Ways to Improve Your Credit Score

If you check it out and see that you have a poor credit score then it is time to work out how to make it better.

Just looking at the credit report and sobbing gently isn´t going to make your dream loan any easier to get, although we can recommend it for clearing out your tear ducts anyway.

The first step to improving your credit score is to understand why it is messed up in the first place. One possible answer is that you have over-stretched your finances. This is where debt restructuring could be your unlikely friend.

This video explains what debt restructuring is all about.

Each case is different and you could find that for you the best idea is to combine loans, switch a credit card debt to a loan or maybe pay back the money over a longer period.

If your current debt level is causing problems then you could use a debt payment calculator to see how much you can comfortably afford to pay each month.

As well as using a debt payment calculator, other ways to improve your credit score are simple too. Here´s another video with ideas for doing this.

In some cases, it is as simple as keeping more control of your finances. If you are sometimes late with a loan repayment because of oversights then it might be easy to put this right.

Finally, you need to show some patience once you understand what is a bad credit score and aim to do something about it.

The moves you make to improve your financial situation will take some time to take effect. However, it will be worth it when you see that you can now access credit more easily.

 

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