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Melissa is a mother of 2, lives in Utah, and writes for a multitude of sites. She is currently the EIC of HarcourtHealth.com and writes about health, wellness, and business topics.

If someone missed any loan payments or paid a credit card late, it impacts their credit. If they have high balances on credit cards or have file bankruptcy, that’s another red flag for lenders. Bad credit is a signal that lets lenders know that a borrower had difficulty paying bills in the past, and it impedes their ability to buy a car, home or even get a job.

How Bad is Bad?

Generally speaking, bad credit tells lenders that someone cannot meet their obligations or are unlikely to. Credit rating agencies like Experian, Equifax and TransUnion assign each consumer a credit score depending on their financial history. Maintaining a score over 700 nets a creditworthy rating and easy access to loans and credit. However, a score under 600 indicates bad credit and closes many doors for those with spotty credit.

Ultimately, the best thing you can do is clear up your credit. However, there are alternative loans that can help in a pinch, according to title loans Orlando provider Embassy Loans.: “The type of loan that we provide depends on your being able to provide us with a clear title to the car. In addition to that title document, we will need to see a couple of other items to help us know who you are and where you live. Your Embassy representative will tell you exactly what we need, but it will be simple items like your driver’s license and a utility bill or two.”

Is Bad Credit Really that Dire?

It is if someone needs access to financing to buy or upgrade a home, get a vehicle or any other large asset. Also, credit cards and bank loans available to those with low scores are extremely hard to get.

If someone has a credit score south of 600, the best rates fall off the table for them. Of course, paying higher interest rates doesn’t help those already in a precarious financial situation. Alternative financing might be the best way to go to avoid drawing advances from credit cards with up to 22 percent interest and auto loans with up to 15 percent interest.

What Can Be Done?

It takes more than one missed payment to ruin a credit rating. However, a pattern of maxing out credit cards, missing payments and spending more than they earn can set consumers back, especially those trying to establish a new way of living, such as young couples or recent college grads. Avoid this behavior to begin cleaning up red marks on a credit report.