Well if you have a pile of money in your basement that rejuvenates itself two times a day, then having bad credit isn't a concern for you. If, on the other hand, you are like most people, you need to borrow money sometimes to have the things that make life a little more enjoyable. Things like a new house, a car, and furniture or maybe you have an unplanned emergency and need to use a credit card so you don't have to dip into the mortgage or rent payment. Trying to accomplish all of these things can prove to much more difficult with a low credit score or even just a slightly less than perfect credit record.

There are many factors that go into determining ones credit score. Things like how many credit cards a person has, what the balances on those cards are compared to the limits, late payments, collections, bankruptcies, and so on. All of these components are then thrown into some mystery calculation, which is different from lender to lender.

It seems once a person makes one financial misstep that is reported to the one of the three credit agencies, it gives the banks free reign to interpret all things on a person's credit report in a negative light. A person with a couple of 30 day late payments in their past will consistently hear things like "We're not even considering you late payments but you have too few revolving accounts so we can't accurately gage your credit patterns." Or one may hear "We're not even considering your late payments but it looks like you have too many credit accounts." When someone with less than perfect credit is trying to find a loan, it often becomes and endless game of catch 22. They'll tell you that the balances are too high and then when the balances are paid off they'll say the balances are to low and they can't determine exactly how you use your credit because they can't see that you carry any balances.

There is a simple reason why banks won't look past that dang credit score that is mysteriously calculated using different methods by every bank and the major credit agencies. They are in business to make as much money as possible. They know if a person has a low credit score they can charge more money to obtain the loan, plus charge more interest on a loan.

The major lenders will tell you it's because they are assuming more risk by lending to a person with a low score. This argument doesn't hold water, because if they truly thought that a loan would not get repaid they would not even consider making the loan. They will gladly lend a person with solid credit history for a year or more, but will still punish them for small missteps in the past ten years, so they can make more money.

The best way to avoid this situation is just to make every payment on time, but there are many circumstances that happen in life that don't always make that possible, medical emergencies, divorces, or you just might not have realized how the kooky credit system worked until it was to late.

If you have the misfortune of having slightly less than perfect credit, don't fret, there are still lenders out there who willing to give you loans at decent rates. It just requires a little more leg work on your part, to find them. They usually come in the form of non-conventional lenders, who do not necessarily have to abide by the same lending rules as bigger financial institutions.

There is also a way for consumers to dispute any derogatory item on their credit report, through the fair credit reporting act. This can be a very daunting task. It is completely possible to do it on your own, but it is highly advisable to higher a law firm to handle this task. Most don't charge more than what you are paying in interest on one of your credit cards per month. Some even offer a money back guarantee.

Oh and if you discover that basement full of the rejuvenating cash let this author know, he would like to get some of it.