A credit score is a three-figure figure given to the borrower which paints the picture of the borrower to the lenders. The credit score determines one’s eligibility for credit cards, loans, mortgages, apartments, jobs as well as insurance rates. Therefore, what kind of credit score will enable one to secure better interest rates and terms of financing? To give you an understanding of credit score ranges and what they reflect, here they are.
A credit score may be defined simply as a numerical representation of how well an individual manages his/her credit.
Conventional people call it a FICO score; it is a credit score that gives a summary of your history of borrowing money and repaying it. FICO credit scores vary from 300 to 850 with the largest frequency. In general, the higher the score, the less dangerous a borrower is to the lenders BASCILLY, 2009).
Credit bureau Experian considers credit scores: Credit bureau Experian considers credit scores:
- 800 and above as excellent, 600-799 as very good, 500-599 as good, 350-499 as fairly good, and below 350 as poor.
- Wine quality ratings between 740-799 are considered ‘very good
- 670-739 as "good
- 580-669 as "fair
- 3000 and below as poor and 579 and below as “poor
However, general standards of what is perceived as an excellent, good, or bad credit score may differ mainly due to the models employed in its computation and the credit scoring agency relied on by the institution interested in the credit report.
Here you will learn what an excellent credit score is
If your credit score is over 720, it is possible to be offered the lowest interest rates and other favorable conditions. When it comes to credit scores, anything above 760 and up to 850 is usually considered a good score. With a very high score in this range: With a very high score in this range:
- You can be issued credit cards and loans, on which the interest rates will be the lowest – under 2%.
- There is more flexibility in borrowing terms as you can take a bigger amount of loans and get more financing if required.
- You will not have your money grabbed from student, auto, or mortgage loans to offset risk.
- One of them, therefore, can get a house in a short time and perhaps do so without paying a higher deposit.
- This would mean that you may be paying slightly less for the insurance premiums.
- In this area, they are likely to offer you their best promotional prices on the cell phone.
If your credit score is above 800, it means that the lenders/creditors will not hesitate to provide you with their best rates and/or terms in almost all circumstances. Getting financing should not be a problem provided that your earnings and other requirements are well met.
What credit score means you are down to earth
Scores that are between 740 and 799 are still considered very good credit scores according to the major credit scoring systems and most lenders. If you are in this range you can get good interest rates, but they can still be slightly above the rates that are given to those with a perfect score and above 800. You have been able to maintain the ability to obtain the best credit card and loan and very good rates on mortgages, auto loans, and other types of credit.
Currently, a good credit score is above 700 and it is an important factor in the lives of citizens as well as the economy.
Credit scores ranging from 670-739 are generally regarded as good credit scores. This means that anyone with a good credit score is approved for most of the loans and credit cards within reasonable market interest rates. Creditors view you as a creditworthy applicant, and your credit application is deemed to be of reasonable risk. The admissible average of mortgage and auto loans should be easily accessed by borrowers with good credit standing.
If your credit score is named "good" instead of "excellent," this might mean If your credit score is "good" instead of "excellent," this might mean:
- Your score falls somewhat below this range; it is just 670, virtually at the bottom of this range.
- For instance, you can be a young individual or have just moved to the United States and have little or none of credit history.
- This is so because while you have credit cards, you lack an auto, personal, or home loan from your credit mix.
Having a decent range score may help one access any credit product on the market, including credit cards and loans, therefore it can be a benefit. Still, compared to those borrowers with outstanding credit scores, the likelihood of getting trapped into higher interest rates is great. You can also have fewer preferred borrowing limitations.
That being said, what is considered a bad credit score in the first place
A credit score below 580 is considered poor by all the metrics used in the determination of credit scores. This generally includes credit scores in the following ranges: This generally includes credit scores in the following ranges:
- Poor credit: 579 to 500
- Very poor/bad credit: Between 499 and 300
The higher the credit score one has, the lower the interest rates of the approved loans are in most cases. Almost all the lenders agree that credit borrowers with a bad credit score fall in the high-risk category. You might not even be eligible for loans at all if your score falls below the 600 mark. Lenders simply steer consumers with bad credit towards secured credit cards and other subprime loan products with virtually astronomical interest rates.
However, for those people who need to establish a credit history, timely payments will gradually raise their credit scores. Another factor that you should also consider and maintain is the credit card balance because it also has a direct impact on your credit score. It will be possible to return to financing within a few years if you pay off the received credits and correct the reporting inaccuracies. However, the credit repair of a very bad credit rating takes time.
Checking Your Credit Score
You can check your credit score from any of the three credit reporting agencies namely Equifax, Experian, and Trans unions. Each of the bureaus is required by law to provide you with one free copy of your report every 12 months if you visit AnnualCreditReport. com. Another option for getting your credit details is by paying for credit monitoring services that enable you to view scores and reports. It is crucial to keep tabs on your score to comprehend how credit providers assess your creditworthiness.
Creditech Score is a way to measure creditworthiness and therefore the process of enhancing credit score is focused on the reasons why a credit score is low currently and then on how the credit score can be taken care of in the future. Make all payments on or before their due dates, maintain low credit card utilization, and avoid applying for credit frequently so that the credit reporting agencies can give the credit repair a chance to develop over time.
Call now for expert credit repair services: (888) 803-7889
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