How Bad is Your Credit Rating?

Posted by on Feb 8, 2018 in Credit | Comments Off on How Bad is Your Credit Rating?

How Bad is Your Credit Rating?

Credit report is one of the most confused financial terminologies. Irony is that it links with almost all of your financial matters. The next generations may witness an era when they will need a good credit score to find love or marry. May this never happen, but here we have a lowdown on bad credit rating and all ingredients that may ruin your credit score.

Understanding Bad Credit Rating

Credit rating is the numerical value of your financial circumstances and money management. It does not include any criminal records, but it provides the data regarding loans, homeownership, bills, and such. Good behaviour in money management like paying your bills regularly may help improve your credit score.

You can take out your credit rating by contacting your credit company, Equifax, or Experian. Equifax calculated credit rating from 0–600 and Experian calculates the credit ratings from 0–1000.

For Experian and Equifax

According to Experian credit rating system, a person having 0–560 credit score is considered to have Very Poor credit score. According to Equifax, Very Poor credit score falls from 0 to 278. Such people are considered huge risk for lenders.

The Poor credit score is 279–366 in Equifax and 561–720 in Experian. People with poor credit score may take out unsecured loans but they also pose a risk to the lenders.

The Fair credit rating falls in the range 367–419 in Equifax and 721–880 in Experian. Such borrowers pose small risks for the lenders but they may get loans in certain circumstances.

The Good credit score falls in 881–960 in Experian and 420–466 in Equifax. Such people have good chances of loans and other credit benefits.

467+ credit rating in Equifax and 961+ credit rating in Experian is considered Excellent. The loan applications of such people are rarely rejected.

New Permanent Address with Old Occupants Having Bad Credit Rating

Congratulations! You have moved to a new permanent address. Those bad credit mails of old occupants of this house may irritate you. You do not need to worry as these mails or the bad credit of old occupants of this house has no effect on your credit report. Simply, write ‘Moved Away-Return to Sender’ on the mail, put it back in the post box, and relax!

Bad Credit of Spouse and Loans

At least one of the spouses should have Excellent credit score to make sure that the poor credit score of other spouse does not affect their loan applications. Descriptively, if your spouse has a bad credit score and you have Excellent credit score, chances are that the lender will consider your credit rating and accept your application. However, if your spouse has a bad credit score and you have Average or Below Average credit score then chances are that the lender will evaluate both credit reports collectively to accept or reject your application.

Furthermore, the credit score of one spouse does not affect the credit score of other spouse, unless they open a joint account. Your single account will be treated individually. A better way is to improve the credit score of both parties.