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What Is Bad Credit? Why It's Bad and How to Fix It

Braden Ward

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Published in Inflation: What It Is Why It S Bad And How To Fix It

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Bad credit is a term used to describe a low credit score. A credit score is a number that lenders use to assess your creditworthiness. It is based on your credit history, which includes factors such as your payment history, the amount of debt you have, and the length of your credit history.

Inflation: What It Is, Why It's Bad, and How to Fix It

by Steve Forbes

4.4 out of 5

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A bad credit score can make it difficult to get a loan, rent an apartment, or even get a job. Lenders are more likely to approve loans to people with good credit scores, and they may charge higher interest rates to people with bad credit scores. Landlords are also more likely to rent apartments to people with good credit scores, and they may require a larger security deposit from people with bad credit scores.

There are a number of things that can contribute to bad credit, such as:

Late payments
High credit card balances
Too many credit inquiries
Bankruptcy
Foreclosure

If you have bad credit, there are a number of things you can do to fix it. Here are a few tips:

Make all of your payments on time. This is the most important factor in your credit score. If you have any late payments, contact your creditors and make arrangements to catch up.
Keep your credit card balances low. Lenders want to see that you're not using too much of your available credit. Try to keep your credit card balances below 30% of your credit limit.
Limit your credit inquiries. When you apply for a loan or credit card, the lender will make a hard inquiry on your credit report. Too many hard inquiries can lower your credit score. Only apply for credit when you need it.
Dispute any errors on your credit report. If you find any errors on your credit report, contact the credit bureau and dispute them. Errors can lower your credit score, so it's important to get them corrected.
Consider credit counseling. If you're struggling to manage your debt, you may want to consider credit counseling. A credit counselor can help you create a budget and manage your debt.

Fixing bad credit takes time and effort, but it is possible. By following these tips, you can improve your credit score and get your financial life back on track.

Inflation: What It Is, Why It's Bad, and How to Fix It

by Steve Forbes

4.4 out of 5