There are several items to think about when one is pondering what is a good credit score. One way of estimating the ability of a borrower to pay back a loan is to look at that individual’s credit score. The scores can be high or low or in the middle. If a score is high, then it is assumed that a person would be able to obtain valuable credit and can easily pay back funds loaned to them. If a score is low, the perception is the opposite. A low score will make lenders cautious and it will not be easy for one to have monies extended to them. In a lender’s eyes, various scores may mean different things, depending on the type of scoring system that particular creditor uses. This valuable credit score one obtains is helpful to those deciding whether or not to loan funds. Those entities extending credit can figure out the amount of money to offer an individual and with what interest rate as well.
Credit scores are composed of a varying degree of numbers, anywhere from 300-850. A score is made up of a range of pertinent factors. A look at the payment history information consists of thirty-five percent of the score. Observing the amount a person owes is thirty percent. The credit history longevity is fifteen percent of the score. New spending information composes ten percent. Consideration of the various kinds of credit used is the remaining ten percent of the score number.
Equifax, Experian, and TransUnion are three well know credit reporting agencies. One free annual credit report can be obtained from each of these companies for a total count of three reports live skor a year. It is very important to digest the contents that are on one’s report with a fine tooth comb. Information that is not accurate and correct can sometimes be found. Sometimes errors in late payment content, payment histories and amounts of monies owed can be seen. A person can be certain in reviewing the report that there is no identity theft as well.
Entities extending credit will be careful in looking closely at numbers on an individual’s credit scores. For the most part, lenders feel that a score of 700 or above is thought to be very good to excellent. One would value keeping their scores high due to the many advantages of toning a high credit number. Credit extensions with low interest rate offers would be secured by the high scoring report owners. Also, fast credit approval processes can be received by those with that excellent high score!
In the list below, one can see the value in looking through the eyes of a credit lender to take in the information as they perceive it:
Excellent credit is a score of 760 or above. Very good credit is a notch below with that 700 to 759 score. A good score falls in the range of 680-699. An okay score is 620-679. A fair or so-so number is summed up in the 580-619 bracket. If a score lies in the 300-579 area, the score is considered poor.