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Entrepreneurs with Good vs Bad Credit

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Having no money is bad, but having no money and bad credit! Now you know you have got to something to fix this mess!

Most entrepreneurs have a gut feeling about their credit – it’s either great, good or bad. But what is a bad credit score really? First, it’s important to understand that there are many different credit scoring models out there and each may use a different scale – or numbers – to convey information. Still, in the lending world, there are some assumptions that can be made about credit scores that fall into different ranges — and, as such, what score may qualify as “bad”.

For instance, most major credit scoring models follow a 300 to 850 range, and while you’re looking at a score measured this way, you can generally assume anything below 600 is a bad credit score. Here are how the basic credit tiers typically work out:

Credit Score Chart

Who Decides if a Credit Score Is ‘Bad’?

As we mentioned, credit score ranges can vary by model. For example, all FICO scores range between 300 and 850 with 300 being the lowest (or worst) possible score, while 850 is the highest (or best) possible score. The range for VantageScore 2.0 credit scores is between 501 and 990, with the higher number representing the strongest score. But its newer version, VantageScore 3.0, has a range of 300 to 850.

Now, the companies that develop credit scores – FICO and VantageScore, for example – do not decide which credit scores are technically “good” or “bad.” Nor do the credit reporting agencies that supply the credit reports used to create credit scores. Instead, it’s up to individual lenders and insurance companies who use these scores to decide which scores demonstrate an acceptable level of risk. They use scores in a variety of ways, too.

These include:

  1. Determining the interest rate they will charge for a loan, or in the case of an insurance company, the discount they may offer on an insurance policy.
  2. Deciding whether to extend credit, how much credit to approve, whether to increase (or lower) a customer’s credit limit or even to close a risky account.

In a way, then, there is no such thing as a “bad credit score,” since the number itself doesn’t mean anything until a lender decides how to use it. In other words, a credit score is only bad when it keeps you from whatever you are trying to accomplish, whether that is to refinance a loan, borrow at a low-interest rate, or get the best deal on your auto insurance.

Moreover, what will be considered bad credit by one lender may be perfectly acceptable to another. For example, with many mortgages, the minimum score required may be a 620, while some credit card issuers offering low-rate cards may reject applicants whose scores are lower than, say 680.

Find Out Where You Stand

Truth be told, lots of people are saddled with bad credit scores. According to 2015  analysis of VantageScore 3.0 data, almost 30% of Americans have poor or bad credit (defined here as a score lower than 601). That 30% amounts to about 68 million of the 220 million score-able people out there, VantageScore says.

Keep in mind, it’s possible to have bad credit and not even know it. That’s why entrepreneurs will want to keep a close eye on their credit. You can check your credit score using Credit.com’s free Credit Report Card. This completely free tool will break down your credit score into sections and give you a grade for each. You’ll see, for example, how your payment history, debt, and other factors affect your score, and you’ll get recommendations for steps you may want to consider to address problems. In addition, you’ll also find credit offers from lenders who may be willing to offer you credit.

Checking your own credit reports and scores does not affect your credit score in any way. You can start taking your credit score from “bad” to “good” by disputing errors on your credit report, paying down excessively high debts and limiting new credit inquiries.

Click here to get your FREE CONSULTATION.

Good vs Bad Credit

Don’t Do This To Your Credit

There are some things that you should know about credit. Things you should not do and some things you should defiantly do to keep good credit.

Let’s deal with the things you should never do first:

  • Do Not pay for credit repair
  • Do Not pay for loan consolidation
  • Do Not file bankruptcy
  • Do Not freak out

Now I know many of you are saying wow I have done these. Yep me too. But I have learned so much since those days and now you’ll learn some of what I have learned.

Okay now for the things you should do to your credit:

First, you need to realize that you can get yourself out of debt and you don’t need to pay a service professional to help you do that. Why pay a credit repair person to make a phone call for you when you can do that yourself?

Don’t freak out over your current financial situation. This may be hard to grab a hold of right now but it’s true. You caused your current financial status about six months ago. So, freaking out now does not help anything. I know it causes you stress, medical issues, anxiety, and even marital problems. But the truth is that you can change everything just like you caused everything. You see whatever the reason is why you are behind on your bills does not matter. The people you owe don’t really care.

So, calm yourself and figure out what you can pay each month and call them and simply tell them what you can and cannot do. Don’t let them “up-sell” you and make you pay more than you know you can afford.

Note: If your bill says $40.00 a month and all you can pay right now is $20.00 a month. If you send a check for $20.00 and they cash it. It’s a contract in the court’s eyes and they’ll have to accept your $20.00 from then on.

If you are like me – I have filed bankruptcy three times in my life and it was not fun. At the time when I filed, I felt that there was no other way for me to see day light. Today I know that’s not true. I still have bills to pay and my credit isn’t the best but I am knocking the bills down one at a time and my credit is getting better and you can do the same.

If you have already filed bankruptcy – know worries mate. Thinking about filing don’t. In any case, you can change your financial status in just a few weeks.

Join us on our business builders level and start making money from home. Gain your time freedom, financial freedom, and live stress-free by learning how to make money working from home.

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