Your credit score is a reflection of how responsible you are with your finances. It is a number assigned to you based upon your track record of how well you handle credit responsibilities. Having a bad credit score means that your credit reports have shown some negative credit history activities.

Negative credit activities will lower your overall credit score. If a creditor sees that you have a bad credit score, you will not qualify for the lowest interest rates because you are looked upon as a high risk. If you have a really low or bad credit score, you may not qualify for the loan you were hoping to qualify for at all.

Credit scores range from 300 to 850, the closer you're score is to 850, the more money you will save. There are predetermined credit score levels consumers must reach in order to qualify for these money saving, low interest rate loans. The higher you can raise your bad credit score, the more money you will be able to put into the bank rather than pay high interest rates.

If you can raise your bad credit score up to at least 760 before applying for that big loan, you will qualify for the absolute best rates possible. This is considered to be an excellent credit rating.

If your credit score is between 660 and 759, you are at the second highest level. You will most likely qualify for a sizeable loan with interest rates about .24% higher than consumers with the best credit rating.

If you can raise your bad credit score up to 580 - 659 you will be in the fair credit rating category. Monthly payments will be about 1.5% higher than the average consumer with the best credit score.

Having a bad credit score below 579 will cost you, it is in the high risk category and you will most likely pay a full 3% more in annual interest rate fees.

But having a bad credit score is not the end of the world. Your credit score is constantly changing based on your current credit activities. If you know exactly what factors are involved when creditors calculate credit scores, you can take the necessary steps to raise your score considerably and qualify for the lowest rates possible.