It is very important to understand how your credit affects your ability to make purchases. Bad credit can affect your ability to make major purchases including a home or a vehicle. In some cases, it can prevent you from gaining employment. We have all heard of businesses that tell you bad credit isnt a problem. However, that is not the reality of the situation. While they might be able to get you financing, you will pay a much higher interest rate due to having bad credit.
Your credit rating is based on several factors including your payment history, the amount of debt you owe, the possible amount of debt you can incur on revolving accounts, and the length of time you have maintained your accounts. These factors are combined to formulate your credit score. The maximum credit score possible is 850. The higher your credit score, the more likely you can obtain credit at a good interest rate.
Low credit scores indicate to lenders that you are a high risk. This means it is likely you wont be able to repay the loan as outlined. You are labeled with having bad credit, and generally sent on your way without the loan you wanted.
How do you get bad credit? The most...
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