You check your credit to find out it’s bad — but what does that mean? It might be obvious that something following the word “bad” isn’t great, but things start to fall apart once you try to move beyond that.
According to FICO, bad or subprime credit ranges from 300 to 669. If your latest check reveals your score falls somewhere between these two numbers, here’s what you need to know.
1. You Can Borrow with a Low Score
One common misconception about bad credit is that you can’t take out a loan if your score is below prime. It’s an easy one to believe. After all, some lenders deny loans and cash advances if your score is below their requirements.
But sometimes, it’s not always possible to put off borrowing until your score is where advisors want it. Sometimes, your tire blows on the highway, and you’re stuck paying for a tow and its repair when you have no savings in the bank.
If you rely on the car to get to work every day, you can’t put your repairs on hold until you can boost your score. Luckily, there are online installment loans, cash advances, and personal lines of credit you can borrow in an emergency.
If you’re stuck trying to handle a repair or medical expense, take some time to research online direct lenders. Some online direct loan lenders understand that people with bad credit need help in unexpected emergencies. They may adjust their fees to reflect your score, but they may not deny you outright for having subprime credit.
2. Bad Credit Isn’t Forever
When you’re struggling with bad credit, it can feel like a life sentence. But take a deep breath — no score is permanent. The financial decisions you make today will impact your score tomorrow.
This means you can change your score if you change the way you use cash advances, installment loans, credit cards, and lines of credit. Paying your bills on time contributes to good payment history, and reducing how often you swipe your cards can improve your utilization ratio.
These two things go a long way to building good history, but they aren’t the only things you should do to get to prime. Check out these tips to help you create a solid strategy.
3. It Takes Time to Undo Subprime History
The good news is you can increase your score if you make good habits that stuff your file with positive examples of credit. The bad news is, these good examples may not be enough to outweigh significant bad entries in your file.
If you have a long history of overdue payments, maxed-out cards, and more serious offenses like charge-offs or delinquencies, these black marks have staying power. Bad history can last up to seven years until they slough off your report. That’s true even if you only contribute positive things from here on in.
Don’t let that discourage you. There’s no one-size-fits-all rule that applies to every file. Every report is different, so you might be able to slowly improve your score without having to wait the better part of a decade.
And even if time is necessary, your hard work now will eventually pay off when your bad credit disappears, leaving only the good stuff in your file. Until then, you have options that work in emergencies.