Editor's choice: Experian Credit Report
- Free FICO Score
- Credit alerts and monitoring
- Report & score updated every 30 days
Finder is committed to editorial independence. While we receive compensation when you click links to partners, they do not influence our content.
Your credit report is a detailed record of your credit history that can affect your borrowing approval, the rates and terms you’re offered and how lenders view your overall financial health.
But even with your report in hand, it can be difficult to figure out where you fall in the different ranges of credit. We walk you though what it means to have poor credit, how you can find out if you have bad credit and what can you do about improving your financial standing.
A signal of bad credit is when your credit report reflects heavy debt, negative repayment histories, rejections, defaults, judgments and other information that lenders consider risky borrowing behavior. It takes more than one negative listing on your report for you to be considered a person with poor credit.
When it comes to how derogatory marks affect your score, all listings are weighted differently. For example, a single credit application will not affect your credit standing by much, but many credit applications made within a short time might. On the other hand, defaults, bankruptcies, late payments and more serious negative listings can quickly cause your score to drop.
The only way to truly know the condition of your credit it to order your credit report. You’re entitled to a free copy of your report every year from the three nationwide credit reporting companies: Experian, Equifax and TransUnion.
Once you have your credit report, you’ll be able to see your borrowing history and individual listings.
Lower credit scores indicate worse ratings that are typically in the range of what’s referred to as “bad credit.” A poor credit score can reflect the likelihood of having a potential negative listing on your credit report in the course of a year.
A “bad” credit score won’t necessarily keep you from approval for loans and credit cards, but what you’re offered could come with worse rates and terms than those offered to a person with a higher score.
Your credit history is used to determine your credit score. Each credit-scoring bureau uses different criteria for measuring your credit score, weighing your history against a proprietary algorithm.
Lenders and even the bureaus weigh the same factors when determining your credit score — even if they weigh them differently — including how long you’ve had credit, your payment history, your credit utilization ratio and how many loan and other types of credit you carry.
In order to know how to change the course of your credit score, you’ll need to learn what sort of activity made it less than favorable in the first place. Here are the typical pitfalls that can damage your credit:
Keep all of this risky behavior out of your credit repertoire to avoid falling into the murky waters of bad credit.
Having poor credit can limit and prevent you from using loans, credit cards and may even affect your chances of being hired or getting the green light to rent an apartment. Some signs that your credit needs a bit of polishing are:
Improving your credit score can be a slow process, but it could help you get financed down the road with more flexible options and better borrowing terms.
Navigate car deals and a wavering market if you’re buying a ride during the coronavirus.
With limited information available online, you may want to consider other options.
Five ways to handle your debt and repay what you owe.
Find a line of credit — even if you don’t have a perfect score.
Equifax launched a new product that lets you volunteer your bank account information when you apply for a loan. Here’s how you could benefit.
Refinancing with another lender or even switching repayment plans can free up room in your budget and even save on the total cost.
State law may benefit you when you’re in debt.
Here’s how much you can earn using Swagbucks.
Find out when you can enroll in health insurance for 2021, and compare policies.
Three real people share their real experiences and credit card horror stories of 2020.
finder.com is an independent comparison platform and information service that aims to provide you with the tools you need to make better decisions. While we are independent, the offers that appear on this site are from companies from which finder.com receives compensation. We may receive compensation from our partners for placement of their products or services. We may also receive compensation if you click on certain links posted on our site. While compensation arrangements may affect the order, position or placement of product information, it doesn't influence our assessment of those products. Please don't interpret the order in which products appear on our Site as any endorsement or recommendation from us. finder.com compares a wide range of products, providers and services but we don't provide information on all available products, providers or services. Please appreciate that there may be other options available to you than the products, providers or services covered by our service.