Wasn't sure how to title this to get some responses. I've read SO many boards in the last 30 days and there seems to be so many different sitautions. I was just wondering, what does one consider "bad credit" or should I say a "bad credit report". What is more important on a credit report. Paid as agreed, no collections or high credit score with some collections.....etc. I've seen on another website where people have had 5 collection accounts that are not old but a lot of paid as agreed. I've seen so many variations of bad credit report but was just wondering what is the most detremental items that can be on a credit report. What should your credit report look like in order to be considered credit worthy? Me, I have no judgements, no foreclosers, no personal loans, no credit cards, no car loans and no mortgages. Just some small pesky medical bills (and a paid as agreed student loan)......that in recent weeks I have either PFD, had removed or just paid.
Your question is a good one, and is a tough answer. In the end, it is the "credit score" which is "usually" the final determination. A "good" credit score is also a tough number to nail down, but here are the basics: Rule of thumb, a "good credit score (using FICO scores) is roughly 700. You can get approved for credit with lower scores, and each lender/creditor uses their own criteria. But, if you target a 700, you will find a variety of credit options, and usually get approval easily. As to "what makes a bad credit report", there are a lot of variables. In order of "baddies", anything that qualifies as a "Public Record" is at the top of the list. This includes bankruptcies, foreclosures, judgements, tax liens, repos, etc.. Basically anything where legal action was taken. After that "Collection Accounts" are the next worst, "Paid" collection accounts look better to creditors, but they do not help your credit score. Next, "Charged Off" accounts, 180 days lates, 120 days, 90, 60, etc. Any "late" of 60 days or more is considered a "serious" negative on a credit report. After that comes the "30 days late", these are considered "not serious", but a string of 30 days lates looks bad. Keep in mind that the age of the negative effects it also, as far as a credit score is impacted, a 5 year old "Charged Off" may have less effect than a recent "30 days late" listing. Also, your "utilization" of your credit can have as much impact on your credit as negative items. If your credit card balances are near their limits, then that is also a "negative". Other things such as a "good mix" of credit, i.e. mortgage, car loan, credit card, dept store cards, etc. plays a role. There is a good tutorial on www.myfico.com It details how your score is calculated, and what effects it. The total picture is what is important, and what it says about how you manage credit. I know the idea can be confusing, but after a while you will get the feel for what is "good credit" versus niot. Hoped this helped.
Thanks Biz, It does help. I guess it works in my favor that I don't have any "public records". I've been reading sooo much lately that I'm credited out.........lol I'm husband is sick of me coming home telling him all the new credit stuff I've learned, proud but tired..............lol Last night I tried to get him to turn off the water heater to save some extra money............he looked at me like I was crazy.......lol
