What Is The Difference Between Good Credit And Bad Credit?
I pay a lot of cards and if the minimum sometimes a little more than the minimum each month. But I do not know the difference between good credit and bad credit. Does bad credit involve not paying your credit? What is the difference between these two concepts?
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Tags: Credit, Difference, good
If you do not apply for a loan, then it really does not matter whether you are good or bad credit loan, as long as you pay your bills on time. The difference is, however, if you pay a credit line to create a new (house, car, new credit card, ETC.) Someone with good credit (low balances, always punctual, high credit score), a rate better than someone who does not always responsible with has their money. In short, your credit rating reflects the good / bad a risk you with the loan. Lenders charge a higher interest rate if they learn about their ability or willingness to pay its bills affected.
You have bad credit by not paying their bills, not the payments on time, and that makes your credit score to drop. The lower your credit score, the higher will be the interest rate, if on any type of credit or loans applied.
Your credit score is part of the following things;
1. Payment history 35%
2. Time in the office 15%
3. New credit 10%
4. Type of credit used 10%
5. Debt / Taxes 30%
How do you view the articles 1,2 and 5 are the most important in relation to the guests. So we will want to) at least 3 revolving accounts (credit cards, loans, long history of good pay and at least 2 shares (cars, boats, houses or personal loan), also with a good reward for a long time, history, achieving the highest score and profile.
You always want to make their payments on time or ahead of schedule. How much can you pay each month and try not to exceed 30% of your credit limit in a month.
If you do, you never worry about your credit card. Good credit takes years to identify and destroy only about 3 months.
I would suggest you to the website that I mentioned in the Source list to go and get your free copy of Consumer Guide. It has a lot of very good information about credit.
Good credit is usually something like a mortgage or car loan or low students. The reason this is good because it helps you, your credit history and shows potential lenders that has a history.
Bad credit is the credit card debt or high interest rate loans. The reason is bad credit is because it has higher prices and higher balances. If you have no balance on your credit card (also known as the cost in full) a month, then it would be classified as bad credit. Creditors look at this kind of negative elements and high balances on credit cards will negatively affect your score.