|
What is the difference between a good credit rating and a bad credit rating?
Sponsored Links
Simply put, you never want to have bad credit. People who are never late with their payments, whether it is a payment for a credit card, utility bills, loans or mortgages will have a clean credit rating.
These people do not apply for credit every other week, do not keep their credit cards maxed out, and they do not spend over their credit card limit. All of these things and more can either put you on the path to good credit or bad credit. Also, good credit is easy to throw into disarray, so you must be sure to stay up to date with all payments and credit limits.
Just as making a payment on time makes for good credit; making a payment late or not at all will make for bad credit. Every single time you miss a payment, make one later than the due date, spend over your credit limit, or even just apply for more credit, this will be added to your credit file. Also, if you consistently take your credit limits to the max, even if you do not go over, this can look bad as well. It says to credit companies that you are always on the verge of going over, and therefore are risky.
If a company is going to extend credit to you when you are a risk to them, then you can expect to pay much higher interest rates. Depending on how bad your credit is, you may not even be able to get credit cards. You will have a much harder time getting something as important as a mortgage and it could actually keep you from getting certain jobs.
The bottom line; good credit will help you in the long run and make it easier to get the things you really want, and at a lower interest rate. Bad credit, on the other hand, will keep you from getting many things and, if you do, it will be at a much higher interest rate.Â
Other Question Categories
|
|
 More Personal Loans...
|
Credit Card Comparison