What is Bad Credit?

Bad Credit in Indianapolis?

Bad credit is a phrase that we hear often, but what exactly does it mean? If you have bad credit, it means that you have failed to live up to your past credit agreements. Those who have bad credit have not paid their credit obligations. They may have had their debt sent to a collection agency, or they may have even had to declare bankruptcy. However, bad credit is not something that happens because you missed a single credit card or loan payment. Bad credit is something that accumulates over time, and it is reflected by your credit score.

Checking Your Credit Score

If you are unsure as to whether or not you have bad credit, the best way to find out is to check your credit score. There are multiple companies that develop credit scores, which means that a “good” or a “bad” credit score is something that varies. Typically, a bad credit score is one that is below 620. Every year, anyone who is a citizen of the U.S. is entitled to receive a free credit report from the three major credit bureaus: Equifax, Experian, and TransUnion. There are also a number of tools that you can use to check your credit score online.

The Impact of Bad Credit

Bad credit can negatively impact your life in a number of ways. Both insurance companies and private lenders use your credit score to decide:

Whether or not they want to extend credit to you
How much credit they will approve
Whether they should increase your credit limit or lower it
And if they should close an account they deem high-risk.

Lenders and insurance companies also use your credit score to determine the interest rate for individual loans or to decide how much of a discount you can receive on an insurance policy. If you have a low credit score, you may be unable to obtain loans. You may also be subjected to higher interest rates. In addition, a bad credit score can affect your ability to get an apartment, a cell phone, and even utilities.

How to Rebuild Bad Credit

Rebuilding your credit will take time, and there are no tricks, but one of the easiest ways to raise your credit score is through auto financing. Since it is easy for drivers of all credit types to be approved for financing through Indy Car Financing, you will have the opportunity to pay off an affordable loan and prove to lenders that you can pay your debts on time. As long as you can successfully budget your income so that you’re able to make your auto loan payments each month, Indy Car Financing will be able to help you drive a car you love while your credit score soars.