The Credit Scale: Where You Want to Be

It’s important to know how your credit scale can affect you when applying for loans, buying a car, or a home. Money may be needed for other reasons and being able to access it at the right time is vital. The credit scale is an estimation of how credit worthy an individual or business is. It’s based upon detailed analysis of overall personal and financial credit history. The higher the score the more credit worthy. And lenders become very willing to make a loan, extend credit or advance money. Lower scores will mean loan denials or loans granted at much higher interest rates. A person with a low credit scale and score is considered a riskier bet because they may not repay the debt. There are a couple of things that you need to know if planning to apply for any type of credit. First, it’s a good idea for everyone to know what their credit score is, and second, how that score is tallied into the credit scale.

The credit score scale is classified as being within a good range or bad range. The Fair Issac Corporation (FICO) classifies this scale between the numbers of 300 and 850. A credit score of 850 is of course considered exceptional, but you do’;t need a score that high to secure a loan. All lenders will take a good look at a person’s credit scale. Some may consider a scale between 500 to 600 good enough to be credit worthy. Some others may refuse credit at this range because it is lower than 600. Of course when the range is high, anyone can walk into a lender’s office with confidence. If the credit scale numbers are lower, steps can be taking to increase your credit score before applying for new accounts.

A credit scale that is between 775 and up is considered perfect. Scores that fall around 300 to 600 are sometimes not eligible for approval from reputable lenders and this scale may also have extremely high interest rates. People with a credit scale from 600 to 750 can usually qualify for loans and cash advances with low to mid range interest rates.
Nowadays everyone is concerned about their financial well-being and managing their debt. In tough economic times it’s more important than ever to have a good credit scale. Credit scores and scales are calculated based upon missed payments, late payments, the number of open accounts, history, bankruptcies and charge-offs. For example, each time a company runs your credit file, points are deducted for accessing the report. Make it a rule not to submit excessive applications for credit request. And make payments on time to improve your rating if it’s on the low side. The three credit reporting agencies in the United States are Equifax, Experian and Trans Union. Each of them will provide one free report each year. They have their own evaluation processes and scores will vary between them. A good financial advisor can also help to navigate the process in determining an individual’s or business’s credit health and also outline steps to make them solvent.

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