What classifies as "bad credit"?
The reason I am asking this, is because often times, lenders say that they welcome those with "bad credit". However, when people with "bad credit" apply for the loans, they are often turned down, conicidentally, due to having "bad credit". Maybe my questions should be, is there a such thing as "horrific credit"? If so, what are the signs that someone has it? Also, are there ANY lenders that approve this particular type of credit?
Public Comments
- Starting from the most serious: 1. Bankruptcy. 2. Defaulting on loans. 3. Multiple missed payments (i.e. you're 3 months behind on your mortgage) 4. Chronically late payments If you're concerned about your own status, get a copy of your credit report at: http://www.annualcreditreport.com Don't go to any other sites - they're all scams - this is the real, official, free one. And of course there are lenders that cater to people with bad credit - these are called "sub-prime lenders". High rates, miserable terms, huge lending fees. Avoid them unless your situation forces you.
- Yes typically recent bankruptcy and insanely low credit scores would qualify as horrific credit... or people with no credit history at all. When you hear people talking about giving loans to people with bad credit they mean ones that just may have too much debt, or certain collections.. Having a credit score between maybe 580-630 would be considered "normal" bad credit
- 600 or below
- Mark P is right as far as he goes. What most people do not understand is that credit score is not everything. Your score is based on the following: 1. Payment history 35% 2. Time in bureau 15% 3. New credit 10% 4. Type of credit used 10% 5. Debt to income ratio 30% In the 7+ years that I have been doing Special Finance, I have seen people with scores of over 700 that could not purchase a vehicle because their score was made up of 1-credit card and some student loans. I have also seen people with scores of around 525 be approved at near-prime rates because their score was low due to debt on credit cards. As Mark said, yes their are lenders out there that will lend money to just about anybody. If someone comes into my dealership and has bad credit but can prove their income and come up with enough down payment, I can get them approved. They may not like the interest rate or how much they have to put down to get the approval, but that's not my problem. I am not the one that messed up their credit in the first place, but I am the one that can show them how to start repairing it.
- The problem is credit card companies and lendors can classify anyone at anytime as bad credit. There are no current laws to deviate from this. The only thing they have to do is not discriminate in lending, but use the bad credit idea by basing it off credit reports no matter what your score is.
- Bad credit is one of the worst problems to have... however there exists a solution. I will hereby talk from my personal experience. I did debt consolidation a couple of years ago, however If I had to do it again I would pay to some minor details, if someone wants to get out of debt today it is pretty easy with a debt consolidation plan, however it may get a bit tricky at times, I suggest you get as much information as possible online on this first, a good place to start in my humble opinion is astraight to the point ebook with question and answer I found : http://umgarticles.atspace.com/debt-consolidation.htm if it helps kindly remember me in your voting!.. cheers!
* Some answers may have been provided by Yahoo! Answers.