How to Get Out Of Debt When You Have Bad Credit
If you are neck-deep in debt, missing payments or carrying balances that are too large to handle, chances are you have poor credit. It can feel as if you’re trapped in a vicious cycle: You need good credit to take advantage of the best deals on debt consolidation loans and balance transfers, which could help … Continue reading How to Get Out Of Debt When You Have Bad CreditThe post How to Get Out Of Debt When You Have Bad Credit appeared first on MagnifyMoney.
Posted — UpdatedDespite all this, it’s not impossible to crawl out of the debt hole with bad credit. You have to understand your options and work extra toward the goal. In this guide, we’ll offer tips on how you can still pay off debt with bad credit.
What is considered a “bad” credit score?
Before discussing how to get out of debt with bad credit, let’s first understand how credit scores work and factors that affect your score.
Your credit score is what lenders use to evaluate your risk as a borrower and a low credit score can make you appear as if you are someone who’s not financially responsible.
The most common credit score system used by lenders is provided by the Fair Isaac Corporation, commonly known as FICO®. Since its introduction over 25 years ago, FICO® Scores has become the standard evaluation measure used by 90% of top U.S. financial institutions.
What’s a Good Credit Score?
Credit Category
Score Range
Excellent
800-850
Very Good
740-799
Good
670-739
Fair
580-669
Bad
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