Bad credit means that you have not managed your finances well, and no credit means that you have no credit history. It is easier to create a good credit record in comparison to bouncing back to a good one. But if you want to qualify for loans or credit cards, then you must have a good credit score; otherwise, no lender or bank will be in favour of approving your loan application. Repair credit score by yourself or take the help of credit repair agencies so that you can take your financial life back on track. Here, let us understand the effects of no credit and bad credit:

No Credit Score

No credit means that you have nothing on your credit report. It means you have not borrowed money from the past seven years. But don’t worry, not having a credit history is easy to overcome. Many people do not believe in borrowing, and as a result, they don’t have a credit history.

But some companies find it a little difficult to work with people with no credit history as they are not sure whether these people would be able to pay for things on time or not. This situation calls for the need of creating a credit history.

How to build a good credit history?

You can initiate the credit building process by applying for a small loan like a credit card or a car loan. Make sure that you make all your monthly payments on time and if possible, try to pay the loan amount a bit earlier than the decided time. Building a credit history will help you clear the obstacles that are laid on the path of getting approval on loan applications.

Manage your credit well so that it boosts your credit score and help you make your financial life a bliss. Even a small mistake can hurt your credit score so badly that it becomes hard for you to repair it.

Bad Credit

Bad credit represents your inability to make payments on time. This thing can deteriorate your credit health in the long run by lowering your score by significant numbers. You must recover from your bad credit by making some changes in your financial behaviour such as being on top of all your payments, not applying for new credit if not necessary, not closing your old accounts, and a few others.