Bad credit can have a dramatic impact on your life. It can limit your ability to borrow money, get a mortgage, rent an apartment. It can even affect many other things that might surprise you, including taking out a simple contract on a cell phone. Read on to find out everything you need to know about bad credit.

What Is Bad Credit?

If you have missed several arrangements to make payments on debts or credit that you owe, it will have an adverse effect on your credit score.

This can affect the decisions made by lenders and some services to give you more credit in the future. They may not let you borrow anything at all, or they may charge you higher interest rates than someone ‘less risky’ with a better credit score.

Your Credit Score

Your credit score is produced by a number of different companies, known as Consumer Reporting Agencies (CRAs). In the United States, they are Equifax, Experian, and TransUnion.

When you ask a lender to borrow money or need to use a service such as insurance, utilities, or home renting, they will assess your credit score. This will be between 300-850, and the higher your score, the less of a risk you will appear to be to the lender/service. A score of 700 or more is deemed to be ‘good’.

Signs Of A Poor Credit Score

There are many situations that can give you a clue that you have bad credit. Common issues are that you can’t get utilities when moving to a new home, or you are getting calls from debt collectors. You may also be turned down from a job you applied for, or you could have problems finding a landlord that will rent to you.

If any of these situations happens to you – or anything looks unusual – then it is imperative to check your credit score. Use one of the CRAs mentioned above as soon as possible to find out how your score is looking.

How To Rebuild It

Once you are aware that you have a poor credit report, don’t worry. As long as you take the right steps to fix it, you can claw back your rating and get on a level footing again. It can take hard work, time, and a lot of determination, but it can be done.

There are a few things you can do. Firstly, you could hire somebody to help you remove your bad credit rating. Take a look at this guide to starting a Charged Off account to get started down that route. You can also repair it yourself. Getting a credit card – or a store card – as soon as you can, will help, even though it might seem counterintuitive. Remember that good credit is given to those that borrow sensibly. So, as long as you are meeting your regular payments, you will be building your score back up again.

As you can see, the negative impacts of a bad credit score can be severe. However, if you apply a focused effort on getting your finances back on track, all that damage can be repaired. Always get professional advice from a financial expert if you have bad credit problems.