Written by: Adam West
Edited by: Lillian Guevara-Castro
The next time you visit the homepage of BadCredit.org, you’ll notice more than just this column.
Our team churns out a steady stream of consistently strong subprime industry news stories (trust me, I’m totally unbiased!), but our consumer side also produces educational content that borders on Mariana Trench levels of depth and reviews of products and services that many subprime consumers qualify for.
Alright, confession time: I’ve never actually needed to use any of these products and services before. Maybe it’s not surprising, but editors for bad credit-focused websites tend to actually have good (cough, exceptional) credit. But this isn’t just me flexing (because it is, a teeny bit), it’s me telling you what years of reading, writing, and editing credit-focused content will get you, and it’s something only people who get paid to do it every day have time for.
A select few have spotless credit profiles. The elusive perfect 850 credit score that only 1.54% of consumers achieve. I actually had the privilege of interviewing one of these brilliant people around tax season in 2022.
Lynnette Khalfani-Cox, aka The Money Coach, learned she had perfect credit in 2021 and is a great example of what someone can achieve through financial education and behavioral discipline. She started her credit journey with massive credit card and student loan debt.
Perfect credit is great and all, but there’s no point in shooting for the stars when you’re starting with your head in the sand. And that’s where many Americans are right now, saddled with record credit card and student loan debt.
We’re also seeing credit delinquencies at a five-year high, which indicates that the subprime market is likely to grow in 2025 as more credit scores tank due to missed payments and heavy debt loads.
Consumers are Confounded by Credit Scores
Credit scoring can be confusing for those who don’t understand what the scoring models are looking at, and many people aren’t even paying attention with around 3 in 10 consumers in a survey commissioned by BadCredit.org in June 2023 reporting not even knowing their credit scores. Credit knowledge is lacking in general with around 50% of the population designated as financially illiterate.
And credit mistakes can be brutal from an impact perspective. Even one missed payment can reduce a credit score by 100 points or more if a consumer is more than 90 days delinquent. That’s why consumers need to know that making a minimum payment, while not ideal and unlikely to dent the principal of a loan, is better than not making any payment at all.
As the great Michael Caine stated as Batman’s faithful butler Alfred Pennyworth in 2005’s “Batman Begins,” “Why do we fall, sir? So we can learn to pick ourselves up again.”
The key word in that memorable quote is “learn.”
People tend to learn best from their own mistakes, and it’s important to acknowledge here that many people who previously displayed positive financial behaviors have suffered financial ruin due to external factors like losing a job or a death in the family.
But for those who just haven’t made wise financial choices in the past, changing behaviors and mindsets today is the runner-up to starting yesterday.
A Slow Climb to the Top of the Credit Mountain
Achieving credit score improvement is a much tougher, less intuitive slog so it’s important to get started soon. It can take months or even years of on-time payments to make up for past mistakes. Even with a credit report that’s riddled with errors, getting those items removed can be a bit of a process and results aren’t guaranteed.
Anyone who promises a significant overnight credit improvement is selling snake oil, and it’s really only relevant to those who are about to close on a house or new vehicle, in which case they probably should have started thinking about checking their credit report a few months ago.
A good credit score doesn’t happen overnight. It takes financial know-how combined with a consistent track record of positive financial behaviors.
BadCredit.org’s focus on financial education content for consumers is comprehensive and intentional as we want to be a resource for helping readers make better money decisions.
Most of our site’s audience comes to us with “bad credit,” hence the URL. And though that might be where you’re starting, it’s not where we want you to end up.
