How do I know if I have a bad credit score?

How do I know if I have a bad credit score?

Is 600 a bad credit rating? How about 500? Or 400? Without context, calculating your creditworthiness based on your score alone can be difficult. Fortunately, we’re here to help you better understand your credit rating, particularly if you suspect you have a bad score.

The good, the bad and the ugly

Your credit score at Credit Simple ranges from 0 to 1,000 – and the closer you get to zero, the uglier your rating looks to lenders.

But at which point does your score sink from good to bad? Here’s a quick rundown of our scale from first to worst:

  • 700 and above: Be proud. You’ve got a good or great score.
  • 300 to 699: Depending on your exact rating, you range from slightly below average to average.
  • 1 to 299: We can’t deny it. You have a bad credit score.
  • Zero: Oof. Your credit rating is in a state of emergency. Click here to find out more about zero scores.

Why do I have a bad credit score?

If you’re at the lower end of the scale, you’re probably wondering what you’ve done to get a bad score and how long it will take to fix it. You may need to request your credit report for a full breakdown of your financial situation, but bad scores are usually due to:

  • Late and missed payments
  • Credit defaults
  • Bankruptcies
  • Writs, summons and court judgements
  • Multiple credit enquiries in a short space of time
  • Debt agreements.

You’ll have to wait five years to survive some of the more serious black marks on your record though, such as defaults, bankruptcies, writs, summons and court judgements.

Can I still access credit with a bad score?

On a good day, a bad credit score means you’ll struggle to get the best deals, but you also risk your applications being rejected entirely.

Some lenders specialise in mortgages and loans for people who have a less-than-stellar credit rating, although you’re likely to face much higher interest rates. Credit cards are particularly difficult to obtain with a bad credit rating, and every rejected application could bring down your score further. And that’s why you may want to spend some time building up good credit karma to balance out any black marks on your file before attempting to borrow.

The information in this blog post is general in nature and does not constitute personal financial or professional advice. It is not intended to address the circumstances of any particular individual. We do not guarantee the accuracy and completeness of the information and you should not rely on it. Before making any decisions, it is important for you to consider your personal situation, make independent enquiries and seek appropriate tax, legal and other professional advice.

Credit Simple

Credit Simple gives all Kiwis free access to their credit score, as well as their detailed credit report. See how your credit score compares by age, gender and community and gain valuable insights into what it all means.

All stories by: Credit Simple