When you apply for credit, one of the first things a lender will check is your credit score. If you know what your credit score is before you apply, you'll have a better idea of what to expect in the loan process.
What exactly IS a credit score?
A credit score is simply a number calculated by the three major credit bureaus that indicates how well you handle credit. This is done by reviewing your past credit history and looking at how you are doing with any current debts as well.
The three major credit bureaus (Equifax, Experian, and Trans Union) all have their own way of determining your credit score. But they each use the same standard scoring system to show how credit worthy you are. It based on FICO, an acronym for Fair Isaac Corporation. That's why you'll often hear people use the term "FICO Score" when talking about credit scores.
The truth is, lenders won't always ask for credit reports or credit scores from all three credit bureaus when you apply for a loan. Fortunately, since the "big three" all use the same FICO system, a score of 680 from one is thought to be the same as a score of 680 from the other two credit bureaus. Even so, it's a good idea to review your credit report from each one, as sometimes mistakes are made. When that happens, you should contact the credit bureau to have them corrected.
Where Do You Fall - What Is A Good Credit Score?
Your credit score can range from 375 to 900 points. The higher the number, the better you are. Getting credit will be easier, and you'll likely get better loan terms as well.
There is no standard scoring system that lenders must use when approving loans. They each have their own guidelines and cut-offs. But here is a general idea of the different ranges credit scores tend to fall in.
If you have a credit score of 650 and above, you probably have a very good credit history. Because you've been responsible in the past, you will probably find the approval process is quick, easy and painless. An added bonus is that your loan terms and interest rate will probably be very good.
Scores between 620 and 650 are considered average. This means your credit is basically good. If you fall into this range, lenders will tend to look for any possible credit risks before approving a high credit limit or large loan amount. You may find you have to provide additional documentation and explanations when applying.
Chances are good that you will be able to get credit at a good rate and decent terms. It's just that instead of quick and easy, it can take a little longer to get approval.
Don't panic if your credit falls below 620. It doesn't mean you will never get credit. The right lender may still be willing to give you a loan, but you need to accept that your interest rate will likely by higher and terms won't be as good. - 16928
What exactly IS a credit score?
A credit score is simply a number calculated by the three major credit bureaus that indicates how well you handle credit. This is done by reviewing your past credit history and looking at how you are doing with any current debts as well.
The three major credit bureaus (Equifax, Experian, and Trans Union) all have their own way of determining your credit score. But they each use the same standard scoring system to show how credit worthy you are. It based on FICO, an acronym for Fair Isaac Corporation. That's why you'll often hear people use the term "FICO Score" when talking about credit scores.
The truth is, lenders won't always ask for credit reports or credit scores from all three credit bureaus when you apply for a loan. Fortunately, since the "big three" all use the same FICO system, a score of 680 from one is thought to be the same as a score of 680 from the other two credit bureaus. Even so, it's a good idea to review your credit report from each one, as sometimes mistakes are made. When that happens, you should contact the credit bureau to have them corrected.
Where Do You Fall - What Is A Good Credit Score?
Your credit score can range from 375 to 900 points. The higher the number, the better you are. Getting credit will be easier, and you'll likely get better loan terms as well.
There is no standard scoring system that lenders must use when approving loans. They each have their own guidelines and cut-offs. But here is a general idea of the different ranges credit scores tend to fall in.
If you have a credit score of 650 and above, you probably have a very good credit history. Because you've been responsible in the past, you will probably find the approval process is quick, easy and painless. An added bonus is that your loan terms and interest rate will probably be very good.
Scores between 620 and 650 are considered average. This means your credit is basically good. If you fall into this range, lenders will tend to look for any possible credit risks before approving a high credit limit or large loan amount. You may find you have to provide additional documentation and explanations when applying.
Chances are good that you will be able to get credit at a good rate and decent terms. It's just that instead of quick and easy, it can take a little longer to get approval.
Don't panic if your credit falls below 620. It doesn't mean you will never get credit. The right lender may still be willing to give you a loan, but you need to accept that your interest rate will likely by higher and terms won't be as good. - 16928
About the Author:
As you can see, your credit score is a big factor in the type of credit you are able to get. If you find your credit score isn't as high as you'd hoped, don't despair. There are things you can do to improve your credit rating starting today! For more articles on personal credit and how it works, visit http://CreditHelp.ImprovingYourFinances.com
No comments:
Post a Comment