A credit score is a three-digit number which is designed to evaluate people’s financial strength. Credit scores mostly range between 350-800. Often creditors consider a score over 650 as a good score. A score over 750 is regarded as an excellent score.
If you want to take a loan, the provider bank or any other loaner will take your credit score in to account carefully. A good score symbolizes your punctuation in debt settlement. However, a borrower with a low score has a little chance to get a loan since a bad credit proves that he or she may have difficulties in repaying the debt.
Although credit score is not the only item that affects your loan, it is the most crucial factor that creditors consider.
Continue reading this article in order to get informed in detail about good credit scores. We have gathered information about how you can boost your scores, too.
A good credit score in different score modelling systems
There are several scoring models that measure a variety of factors to define the credit score. Most common scoring models that are used widely by lenders are FICO and Vantage, scoring models.
The FICO system is designed and produced by Fair Issac Corporation. The Vantage scoring system is created by the three main credit reporting bureaus. (Experian, TransUnion, and Equifax).
A FICO credit score between 670 -739 is considered good. According to statistics, just 8% of applicants in this group would have difficulties in repayment. A FICO scores lower than this range (580-669) is considered as a fair score.
If your score belongs to this category, you probably may have difficulties in borrowing money. We strongly recommend you to replan your credit management before it is late. A FICO score under 580 is considered very poor and needs serious credit repair. A FICO score higher than 800 is exceptional and provides better chances to get the best rate loans.
A Vantage score between 661-780 is a good score. Lenders approve applications in this range for competitive rates. A Vantage score upper than 780 is excellent and provides opportunities such as low rates and favourable accounts and credits.
However, a Vantage score lower than 600 is considered pooer by loaners. If you have a fair or poor score, you have to change your financial purchases. We recommend you to get some credit counselling and replan your credit management.
Factors affecting credit score
- Credit card payments (number & time)
- Debt settlement (mortgage loan’s settlement, bank debt settlements, and any other loans you have borrowed)
- Credit accounts (types, quantities and age of accounts)
- Bankruptcy filing history
- Credit report inquiries
- Your total debt
Why having a good credit score matters?
A good score matters because your credit affects your ability to afford a wealthy life.
A good score means you have a better chance to get loans, and you would likely repay them in easier terms and with low interests. However, a bad score not only affects your chance of getting loans adversely but also results in higher interests. Higher interests can cost you hundreds or even thousands of dollars in an extended period.
Therefore, a good score is essential, while your buying ability and savings matter.
Boost your score
If you have a bad score, you can face lots of credit issues. Lower credit limits, issues in debt settlement, higher loan interests, etc. are some problems you are likely to have with a low score. Although the credit score is not the only thing that creditors consider in loaning, it is the most exquisite factor for most of them. If you wonder, some loaners observe your income and some other factors, too.
Anyway, if you have bad credit, you have to repair it as soon as possible. If you have tried, but you couldn’t fix your score, you need to get professional help.
However, if your score needs a little fortifying to enter the good range, you must use credit boosting methods. There are some methods that you can use to boost your score. To get adequate information and further information, consult a credit repair company. Enrich Financial offers free credit counselling. Moreover, if you are not aware of your credit report and your score, you can contact Enrich Financial to get an accurate free credit report.
A credit score is a three-digit number which helps loaners to evaluate your credit status. A good score represents a good history of debt settlement. It also shows that you have acceptable credit management. So, a good score can approve your loan application for competitive rates. Moreover, borrowers with better scores repay loans with lower interests and under easier terms. Lower benefits can save you hundreds or thousands of dollars of savings in years.
Although creditors consider other factors like your income, in deciding to loan you, the credit score is the essential option for them. For a wealthier financial future, you have to repair your bad credit or boost it if you have a fair score. If you do not have enough knowledge to manage your credit, do not hesitate to get professional counselling and support.