The question might seem a little obvious to some if you’re already in debt, but we think that it deserves its own conversation here: what does it really mean to have bad credit? Is it just something that you know you have, or can you really go a long time without really realizing that your credit isn’t where it needs to be?

That’s the question that we think needs to be answered as soon as possible. The truth is that everyone is going to have some different ideas on what bad credit really means, but there are some things that we really can agree means that you have bad credit.

First and foremost, if you have a credit score below 600 across the board, chances are pretty good that you have bad credit. This is a level where most lenders aren’t going to want to give you good terms for credit. There will come a point where you will have to clean up your credit in order to get some credit products.

Can you have less than 600 credit score and get store credit cards? Yes.

Can you get a bad credit auto loan — yes, you can.

Can you get a home loan with a high interest rate — yes, you can.

Can you get a credit card with a super high interest rate? Yes, you can — but you’re going to pay a great deal for these things. And that’s actually why so many people tend to want to have good credit.

The basic way that you compensate the lender for taking you on as a credit risk is through interest rates. If you have great credit, then you’re not going to pay as much as someone else that doesn’t have good credit. You just need to make sure that you’re thinking about all of your options. Do you really need that credit product so bad at the moment that you’re willing to pay more to get it? Probably not. The only time where things like cars are emergencies is when you really don’t have one. And in that case, you might have to think about public transportation being an option over trying to afford bad credit auto loans that could end up making your situation even worse than what it was. You just need to really look at your finances and find out!

What about the road to good credit? Well, we’re going to talk about that next — read on!