Potential For Getting Approved For A Loan Decreases With Credit Scores Under 650

Whats in a credit score and how do lenders and creditors view that magical number known as your credit score? If you plan on taking out a loan, applying for a credit card, or buy a house or a car your credit score will impact this. Most people do not understand the meaning behind their credit score so lets break it down by the numbers and how we can improve shall we?
Your Score Range: 300-549
If you fall into this range I have bad news for you, you fall into the worst possible credit score range. It does not get any worse than this. Roughly 16 percent of all Americans fall into this credit score range sadly. It will take quite awhile for you to dig yourself out of this hole but with time, budgeting and repayment of past debts you will win back the trust of creditors and see your credit score rise. People with credit scores of 300 to 499 default on loans 83 percent of the time while those with scores between 500 and 549 default on loans roughly 70 percent of the time. This of course means most creditors won’t touch you with a 50 foot pole. When you do find a creditor willing to take a HUGE gamble on you, your going to pay high interest rates to make up for the lenders risk of even granting you credit in the first place. For large loans like a mortgage this can mean paying 10s of thousands of dollars extra over the lifetime of the loan.
Since your credit did not go sour over night you simply can not expect a quick fix. Anyone claiming they can fix your credit quickly is lying and chances are they are trying to defraud you out of your hard earned money. You will need to make use of things like secured credit cards to rebuild your credit and loans through non profit lenders. Not missing any payments and keeping your credit utilization down will help improve your score over time.
We found a good video from Chase Bank with some practical tips for improving your credit scores and potential for qualifying into a new loan.

Your Score Range: 550-649

This credit score range is below average. With this score picture being on a ship with a hole in the hull, a slow leak, its not to late to patch the hole however though the ship could still go down if not attended to. The national average for credit scores is 660 and you are below that range. The good news here is that you are not to far gone. I myself once fell into this credit score range with a 598 score. People with scores of 550 to 599 have a 51 percent chance of defaulting on loans and those falling between 600 and 649 default 31 percent of the time. This puts you into the moderate high risk pool for credit.
The good news is that with this credit score range you can obtain some normal un-secured credit cards and a few lenders will approve of loans for you. The down side is your interest rates will be through the roof. High interest is the cost of falling into this credit score range. repay all past debts, work on establishing one new line of credit once you have addressed past debts. Pay more than the minimums on your credit accounts and avoid applying for multiple credit lines. Over time your score will rise. It is also advisable to pull your credit report once a year which you can do for free and correct any mistakes that you find as mistakes can and do happen and will effect your credit score.