What's a bad credit score?

Understanding Bad Credit Scores: How to Build Yours with Boshhh Mobile

Do you want to understand what a bad credit score is? Learn more in our blog at Boshhh Mobile and discover how you can improve your credit score simply by managing your phone contract.

A credit score is a numerical representation of your financial history, reflecting your experience with credit and repayment. If your score falls on the lower end of the scale, it can significantly affect your ability to secure borrowing options, such as mortgages, credit cards, and loans.

In this blog, we’ll guide you through everything you need to know about living with a bad credit score, including its causes, effects, and how specialised options like bad credit phone contracts can assist you in rebuilding your score.

What Is a Bad Credit Score?

Credit reference agencies have varying scoring systems. At Boshhh Mobile, we partner with Equifax, which rates credit scores as follows:

• Poor: 300-579

• Fair: 580-699

• Good: 670-739

• Very Good: 740-799

• Excellent: 800-850

What Causes Bad Credit Scores?

Poor credit scores can happen to anyone, and many people only realize they have a bad score when applying for a loan, mortgage, or credit agreement. Here are some key factors that can lead to a dip in your credit score:

1. Little to No Credit History: Having limited experience with credit can result in a low credit score. Lenders view applicants with minimal credit history as risky and may be hesitant to accept them.

2. Missed or Late Payments: If you have experience borrowing money—through credit cards, mortgages, or loans—but have missed payments or been late, it signals to lenders that you may struggle to manage your finances effectively.

3. Frequent Credit Applications: When you apply for credit, a hard search is conducted on your credit history. Multiple hard inquiries in a short period can negatively impact your score, making you appear overly reliant on credit.

The Effects of a Bad Credit Score

A bad credit score can lead to several financial challenges, including:

• Refused Credit: The most significant consequence is the likelihood of having your credit applications denied. Lenders consider low scores a risk, indicating potential difficulties in making timely repayments.

• Higher Interest Rates: If you have a low credit score, you may face higher interest rates on loans, making your repayments significantly more expensive over time.

• Increased Insurance Premiums: Insurance companies may charge higher premiums to those with lower credit scores, reflecting their perceived risk of late payments.

• Difficulty Buying a Home: When applying for a mortgage or renting, landlords and lenders will check your credit score. A low score may hinder your chances of approval, as it suggests you may struggle to meet payment obligations.

Can I Improve My Credit Score?

Absolutely! Credit scores are not static; they can change throughout your life. Fortunately, there are steps you can take to improve your score, especially when you're facing challenges in securing loans or credit agreements. Here’s how to boost your credit score:

1. Keep Up with Your Payments: If you’ve taken out a loan or are using credit, ensure you don’t miss any payments. Setting up standing orders can help you manage your budget and ensure payments are made on time.

2. Register to Vote: It may seem simple, but being registered to vote is an effective way to enhance your credit score. Registering at your current address confirms your identity and location.

3. Reduce Credit Searches: Frequent hard credit checks can harm your score. Space out your credit applications and apply only for credit that you are likely to receive.

4. Seek Expert Advice: If you’re feeling overwhelmed by your low credit score and unsure how to improve it, consider reaching out for professional advice.

At Boshhh, we specialize in bad credit phone contracts designed to help individuals with poor credit scores. Our SIM-only plans allow you to build your score over time, proving to lenders that you can make regular payments while benefiting from the UK’s leading phone network.

Additionally, our partnership with Equifax allows you to monitor your credit score at any time. You’ll receive expert support and advice on boosting your score for greater financial freedom.

Learn More with Boshhh

Are you looking to improve your credit report? Boshhh is here to help. Our flexible SIM-only phone contracts offer nationwide coverage and payment plans tailored to help you achieve your financial goals.

Learn more today, and when you’re ready, boost your credit score with Boshhh. Get Started