Misery loves company

Credit scores and who they impact

By Jeremy M. Simon

It can be a major bummer to have bad credit. Having bad credit makes it tougher to borrow money, and when you are approved by a lender, the interest rates you get charged are usually higher.

But look on the bright side: you're not alone! In fact, the number of U.S. consumers who fall into the bad credit or subprime category is massive.

Whether you have bad credit is reflected by your credit score. Credit scores range from 300 to 850, with the bulk of consumers generally having scores in the 600s and 700s.  

Lenders typically consider a credit score below 600 to be risky or "subprime." Approximately 15 percent of consumers who have credit scores fall into this segment. 

Breaking it down further, about 8 percent of consumers have a credit score between 550 and 599, with around 5 percent having a score between 500 and 549, and 2 percent of consumers having a credit score below 499.

Millons of people do not have enough record of credit to qualify for good terms. Even though a large percentage of these consumers are as financially responsible as those with good credit, the companies they have dealt with may not report information to the credit bureaus.

Until these consumers begin to establish credit elsewhere, they can be left with low credit scores. 

Published: June 1, 2007

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