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Bad Credit Facts

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Bad Credit Facts

How credit bureaus calculate your credit score can be confusing and seem shrouded in secrecy.

Americans may have lower credit scores than they anticipate. Because of these bad credit scores, consumers face significant hurdles in terms of obtaining financing for their lifestyle choices often referred to as bad credit no credit loans.

Let’s take a closer look at each of these 6 bad credit facts that every consumer should know in 2019.

Finding Credit at Affordable Interest Rates is Tough

If you are having issues finding credit, you aren’t alone. Most people with bad credit have limited options in terms of getting a loan. Even if you are able to find a loan, lenders will give a jacked-up interest rate which can make the loan seem unappealing and not worth the costs.

A report by Credit.com says that nearly 1 out of 3 Americans have a credit score below 600.

A score below 600 represents a bad to fair rating according to most experts. With this in mind, people with credit ratings in this range can find it to be difficult to find financing offers at all.

Checking Your Credit Doesn’t Ding Your Score

If you believe you have bad credit, the worst thing you can do is not check your credit report. You need to know about all the bad marks on your credit report in order to fix it.

Consequently, if you refuse to check your credit at least once a year, how would you know if someone hasn’t fraudulently opened up new accounts in your name?

If you use a free service to check your credit once a year, your credit score will not be adversely impacted. LexingtonLaw claims that 54% of Americans do not check their credit scores at all.

1 in 7 Applicants Turned Away Due to Bad Credit

How can you pay your bills if you aren’t able to get a job? People with bad credit and bankruptcies can sometimes have issues getting jobs that require them to handle money or financial data.

The reason for this is simple. There is a higher risk for someone with bad credit to perform something nefarious when in control of cash as opposed to someone who doesn’t have bad credit.

With good credit, the motivation to commit a financial crime is lower. Because of this, prospective employees could have issues getting jobs in the financial or government sectors when having bad credit and bankruptcies on their credit reports.

Households with Less Income Have 2x National Debt Average

According to data by compiled by Value Penguin, the average American household has about $5,800 in credit card debt.

Households with a net worth less than $0 had double the amount of credit card debt with figures averaging in the $11,000 range.

How can lower income families break their cycle of dependence on credit when they are using twice the national average?

Poor Credit is Costing You More Than You Think

Data scientists have estimated that bad credit can cost homeowners thousands extra per year when accounting for the cost of their loan when stretched out over 30 years.

That’s why it is important to have a solid credit rating before you begin applying for home loans. While 1 or 2% on a home loan may not sound like a lot at first, you must understand that a 30-year mortgage will have a lot of interest built in so 1 to 2% could mean that you are paying significantly more for your home than you should.

Bad Credit Can Hurt Your Love Life

If you are single, did you know that nearly 40% of respondents mentioned that knowing a partner’s credit score would impact whether or not they would date that specific person.

If you get in a serious relationship with someone, getting a glimpse of how responsible they are with their credit can help you understand whether or not this is a person you could spend the rest of your life alongside.

Many potential suitors take credit ratings into consideration because bad credit can be construed as relationship baggage in 2019.