Real Estate Q&A: Bad Credit Score?
What's a bad credit score?
Your credit report will list your FICO score, which is what potential creditors will look at before giving you a loan. A score above 620 is considered good. A score lower than 580 will likely give you trouble when you try to get a loan without a down payment. About 35 percent of your score is based on your payment history; any old late payments (that nasty college phone bill!) will stay on your record for seven years after the original due date (this date holds even if your debt is transferred to a collection agency).
The best way to improve your score is gradually: Make all your current minimum payments on time, pay any past debts, and keep card balances under 40 percent of your credit limit. Your score improves both as debts are paid and as negative history falls off your record. To raise your score in the next few months, don’t open any new lines of credit and keep paying your loans on time.