You’ve probably heard plenty of people talk about good credit scores, ways to keep your it high, how to do so, and why it’s important. But what about bad credit scores? What are they? How do you get them? How can you recover from them? And most importantly, how can a low score affect your chances of getting a personal loan? We’ll answer all these questions and more in this article!

The Basics of Credit

Your credit score is one of the most important measurements of your personal financial health. It can determine whether you can get approved for certain loans, the interest rates that will be charged on them, and how much money you’re eligible to receive.

Your score is based on several factors related to your credit history. These include

  • On-Time Payments
  • Credit History Length
  • Available Credit
  • Percent of Credit Used
  • Number of New Accounts within
  • Type of Credit (loans, credit cards, etc.)

The higher your credit score, the better your chances are at getting a loan with favorable terms.

What Is a Good, Bad, or Average Credit Score?

In short, a credit score is an indication of how likely you are to pay back the money that you borrow.

The higher your score, the more likely you will be approved for larger loans and other financial products. There is no single way to calculate it, but most people use the FICO scoring system.

The range of scores goes from 300-850. The breakdown of the scores according to the FICO model is as follows:

  • Poor: 300-579
  • Fair: 580-669
  • Good: 670-739
  • Very Good: 740-799
  • Exceptional: 800-850

Ways to Improve Your Credit Score

If you have had a bad credit score in the past, it might be time to focus on improving your score. The first step is to understand how your credit is calculated – which we covered a few sections back.

The simplest way to improve your score is to focus on making sure you are up to date on paying all your bills and credit cards. By doing this, you will increase two key factors of your score – the amount owed and credit available.

We also have a few informational resources available for increasing your credit score and getting out of debt:

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Loans for Credit Card Bills

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Can I still get a Personal Loan with a Bad Score?

The short answer is yes. You can get a personal loan even with a bad score.

However, you may be required to pay much higher interest rates on your loan. But if you’re in a pinch and need a loan before you’re able to raise your score, then there are credit lenders, such as Mark Credit Corp, who focus on working with people who have poor credit scores.

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