18 Feb Bad Credit vs No Credit: What’s The Difference?
What is bad credit, and what does it mean no credit? Are they similar or different? How the one affects the other? Four simple words, but so many questions! You heard some bad credit here, some no credit there, but you don’t really know what’s their difference. You even saw big titles “Bad Credit vs No Credit.” In this article, Baby Boomers Financial will help you to understand the definitions of both terms. As you’re about to read, we listed their similarities and differences, as well as their impact to your credit report. Check them out!
The ultimate debate: Bad Credit vs No Credit
What Is Bad Credit?
Bad credit indicates a low credit rating, as a result of unreliable behaviors with your previous loans, and credit cards etc. That includes late or completely missed payments for mortgages, personal or student loans, credit card installments and more. A bad credit makes it difficult to rent a house, or apply for new credit accounts. If you’re innocent for the above-mentioned financial instability, check for errors in your credit report, or worse, the possibility of financial identity theft
What Is No Credit?
As its name implies, no credit means literally no credit, translated as the lack of credit history. You may think that no credit shows that you’re financially independent, but it actually indicates the lack of evidence for lenders and creditors to trust you.
Bad Credit vs No Credit: What Is Their Meeting Point?
While they are different, bad and no credit share one, and actually big, similarity. Whether you’re guilty for mistreating old credit accounts, or you lack credit, you don’t have a good credit rating. See, a good credit score, is the green light for several financial activities. So, you have to convince lenders and creditors that you deserve their trust.
Bad Credit vs No Credit: Which Is Worse?
There is no absolute answer here, however, bad credit shows that you’re not diligent and capable of repaying your debts. On the other hand, no credit lacks evidence, but gives you a clean page to start with. You can choose to reverse the bad credit, or to build a good rating out of the no credit. They’re both possible.
How to Improve My Bad Credit?
Well there are several ways, tools and services to help you improve your credit score. However, there are no magic ingredients and tactics. The key to success is to create a plan and be diligent with it. It’s not enough to make payments on time, unless you’re doing it, every time! You want some insight? Read our blog post “Increase Your Credit Rating with 4 Simple Ways.”
How to Build My Credit If I Have No Credit?
If you’re in the no credit category, then literally speaking, you haven’t done something wrong. There are credit cards for people with no credit, in order to start your financial journey.
If you need help to repair your credit, then you’re in the right place. Baby Boomers Financial will be glad to assist you and help you reach the much-desired financial freedom you’re dreaming of. Contact us with your inquiry, or request a free credit review.