What is the difference between no credit and bad credit?

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write2respond | 1 year, 5 months ago

Credit refers to the way a person handles money that is lent to them based on good faith. This can mean when a lender is a credit card company, such as Visa or American Express, they trust that they will get back a stated amount that they give you. With this background, bad credit means that you were given money, whether a mortgage or credit card and did not keep up your end of the repayment agreement. This is essentially what happened with the credit meltdown when people were unable to repay their mortgage or their credit card debt. No credit means that a person has never received funds in good faith and agreed to repay the amount lent to them over a period of time. This type of person never owned a home or had a credit card. No credit is better sometimes since there is no track recordor credit history of defaults. It is easier to plead your case and you can get starter credit arrangements.

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Owls | 11 months, 3 weeks ago

No credit history is no credit. Having a history of skipping payments, not making payments or nor repaying the original debt is bad credit. Good credit is a history of paying people to use your own money.

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