Poor credit is also referred to as bad credit. People who have inadequate credit scores in their credit reports are regarded as people with poor credit. Creditors and lenders become hesitant to offer them loans. However, bad credit loans are also available for this kind of people from a limited number of lenders. Concept of Poor Credit Formally, poor credit denotes a bad credit rating or bad credit score. A bad credit score results from delayed payments and default in payments. This impacts the credit report of a particular individual in a bad manner. People who have poor credit scores or poor credit history are regarded as risky by lenders and creditors and generally they are not willing to lend them. How poor credit is ascertained If a person is applying for a bank loan, his credit report is analyzed by the creditors with the help of a credit bureau.
If the person has problems related to missing payments, delayed payments, bankrupcy, CCJs or decrees, then all of these are recorded on the credit report and it is assumed that he has a poor credit history.Poor credit history is also termed as bad credit history, impaired credit history, subprime credit history, adverse credit history or non-status credit history. The credit rating agencies apply a method to analyze the credit history of a particular individual and it is known as credit scoring.
Normally, the range of credit scores is 300-900. The majority of the borrowers fall between the range of 600-700. Individuals having credit scores less than 600 are regarded as borrowers with poor credit scores. A limited number of financial service providers offer loans to people with poor credit history. However, they charge an increased rate of interest on the loans offered by them due to the high risk factor involved. The higher the credit score, the lower the rate of interest, and vice-versa. Poor Credit Loans Loans offered to people with poor credit history include the following:
Bad credit loans
Bad credit mortgage loans
Bad credit home equity loans
Bad credit debt consolidation loans
Bad credit secured loans
Bad credit unsecured loans
Last Updated on : 9th July 2013