Understanding the Difference Between Credit Card Bad Credit and General Bad Credit

11.03.18 06:10 AM By kevinriddle10

Understanding the Difference Between Credit Card Bad Credit and General Bad Credit

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If you believe terrible credit is made equal then you do not know that the differences between credit card poor creditalong with the other kinds of terrible credit on the market. Just how much of a difference does this make? Believe it or not, quite a little. Some bad credit is not too bad in any way, whilst credit card poor credit can keep you from obtaining a car loan at TIFAQ.com or a house. If you would like to know why credit card poor credit is worse compared to other kinds of terrible credit, here are a few things to bear in mind. If you are thinking to yourself right now that you should get a car loan for bad credit to re-establish my credit, then you need to keep reading.

1. Know Your Credit Report

The very first step in knowing the differences between credit card poor credit and other forms of terrible credit is in knowing your credit history and the information it contains.

Your credit report is made up of great number of details pertaining to a payment history. Besides your credit card actions, things like auto loans, utility bills and even outstanding medical bills appear with this report. When a creditor appears at this particular report, they do not just see if making your payments in time, they determine if you have been sued, maintained bankruptcy, allow medical bills proceed, etc..

2. Understand That Bad Things Happen to Good People

Let us say you work for ABC Bank. It's your task to accept or reject mortgage software. You've got three programs facing you. Let us see who you'd approve.

Applicant A has a credit score of 595. This individual has paid their credit cards in time except for a duration of one month after two of the cards have been 30 days. Additionally, there are many outstanding hospital bills from this period of time, but you need a note stating there's a dispute with the insurance provider and that's the reason the health care bills haven't been paid. Aside from that, her charge appears clean. This is overall bad credit.

Now you consider the credit score report by Applicant B. He's also got a credit score of 595, however he does not have outstanding hospital bills. Only a lot of overdue credit card payments along with also a missed car payment or two. This can be credit card poor credit auto approval.

Now we are to Applicant C. This individual also has a credit score of 595, however she is maxed out all her credit cards and has been just making minimum monthly obligations. She has made a couple of late payments lately, and you've got a feeling it is because she is over-extended her credit score. Again, it is an instance of credit card poor credit.