Understanding the credit score scale - where are you
You may understand the importance of having a good credit score but do you understand the credit score scale and what you need to do if you want to improve your score? Without a good credit score you may get declined for loans and if you do get approved for a loan it will most likely have a high interest rate charging you high payments every month. If you have a high credit score then you have a better chance of being offered loans and at a considerably lower interest rate.
The credit score scale ranges from 300 to 850 with 300 being the worst credit score and 850 being the best. The real important facts that you need to understand though is not just what your credit score is or how the credit score scale rates you, but what you can do to influence your credit score.
There are people who work hard at maintaining a good credit score and they may be lucky enough to have a flawless record and a high score above 800. With no credit history at all you will have a score of 800 but with no credit history this doesn't really mean anything. To receive the best loans and best interest rates you need to maintain a good score over time of above 800.
The next level down in the credit score scale is 720 which is still a very good score to have and will still give you the benefits of enjoying loans with good interest rates.
Next there are credit scores in the range of 680 to 720 which is still quite good but not so good to get you immediately approved for loans. You will most likely be approved for loans but you will pay a little more interest than those in the higher credit score group.
When your credit score falls below 680 you will start experiencing some difficulties when applying for loans. This is not a real bad score, but it is low enough that you may be declined for some loans and those that you are approved for will have a higher interest rate and possibly other restrictions. If you find yourself in this range then you want to try to make changes to improve your score.
If your credit score falls below 620 then this is considered bad credit. In some few cases being above 580 may still get you a loan but at a very high interest rate and the amount you borrow will also be limited. To fall below 580 you would need to have something very serious happen such as foreclosure or bankruptcy.
For those who have credit scores below 500 then they must have many seriously bad marks against their credit history. In this range it is very unlikely that anyone would approve you for a loan or credit card and you may also have to pay more for auto insurance.
There are many benefits to having a high credit score and those that do certainly enjoy the rewards. If you have a low credit score you shouldn't give up, but rather make a budget and start paying your bills on time and your credit rating will begin to climb. The longer that you continue with good credit maintenance the higher your credit score will climb. Although bad marks will remain on your credit report for seven years, your actual credit score can improve.
Learn more about the credit score scale on http://www.debtforgiveness.info/
Article Source: Messaggiamo.Com
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