Millions of credit card users out there, shop for accessories, gifts or cars
but they have misconceptions regarding good credit or bad credit and it becomes even mystifying
if we say what is the difference among the terms.

The question that
arises here is what credit is and how you get? When money is borrowed such as
borrowing money from a creditor like credit card company, the borrowed mony
back in full on time then you get positive credit ratings or if the situation is other way round you get the bad credit.

The process can be described with a simple example. You buy something by using
your credit card. Now you become liable
of paying that amount within a time frame that the creditor will provide you.
You will receive a statement that will tell you how much you owe to the lending
company that month. If you don't miss any of the due payments and pay for the
complete amount, the creditor will report to the big
bureaus that you made the payments within time and have done no defaults.
The credit bureaus, who keep your credit history, record this information. More
often credit bureaus get these good reports the better you will get rated and
hence will have a better credit. If the situation is other way round and you
don't manage yourself, you will end up in a financial disaster.

Bad Credit

Bad credit as the term suggests keeps you from several benefits that you could
get with a good credit. With bad credit you will not be able to qualify for
a good low interest rate, credit card, loan, or it may even prevent you from
renting a house.

How to get it

In your financial life, bad credit is the only thing that is the easiest to get while making numerous purchases through cards. It happens when you
don't payback the money you borrowed in time or don't pay it at all. As a matter
of fact, everyone doesn't get a bad credit rating if a payment is missesed or
it is made after due date. It is awarded to those whose default is extended
over couple of months period.

How To Fix It

Bad credit is fixable and it can be removed. In the begining you need acquire
credit report from the three
main credit bureaus namely Equifax, Transunion and Experian. Your credit history
will tell you about your credit rating. It will elaborate your situation and
the steps to adopt for debt
elimination i.e. either to adopt debt
consolidation, credit counseling,
debt settlement or in case of identity
theft, or errors, how
to dispute on false items. I hope not, but if debt has pinned you down,
then the last resort would be filing a bankruptcy
case.

Good Credit

Credit, is essentially the most important factor of our lives which affects
every major buying decision that we take. Good credit
helps to get lower interest rates, better loan options, mortgage, credit
cards or even a new job.