Understanding The Basics : Bad Credit

**asfwaseem** · 12-07-2009, 03:42 AM

Many people have experienced bad credit, but some still may not know what it is. For a long time, there was no established method for determining the credit activities of consumers. However, this all changed when a company called the Fair Isaac Corporation designed a credit scoring system that is called the FICO score.

**jason_simpson** · 08-12-2010, 06:17 AM

Credit Score is a number, roughly between 300 and 800, that measures an individual's credit worthiness. The most well-known type of credit score is the FICO score. This score represents the answer from a mathematical formula that assigns numerical values to various pieces of information in your credit report.

**pamolawilliams** · 08-30-2010, 01:24 AM

According to me, if a borrower has taken a loan, and he is not repaying the loan installments properly as well as continuously, then this is called Bad credit.

**jenny321thomas** · 10-05-2010, 11:43 PM

If your credit score is low, this means you need to start making payments on time. If you have multiple loans and credit cards, get rid of some of them. It is responsible, how can you manage the credit, you can maintain a high credit score. Lenders are much more likely to give you the best rates and characteristics of the loan.

**jason_simpson** · 10-06-2010, 01:28 AM

Following are the five main credit score components and how much weight they carry on your credit score:

* Paying bills on time, every time (35 percent).
* The amount of credit you're using compared to the amount available (30 percent).
* The length of time you've had credit (15 percent).
* The length of time since you applied for credit (10 percent).
* The types of credit you use, including revolving credit card accounts and installment loans like a mortgage (10 percent).