Those with credit scores below 660 may be less likely to qualify for better loan terms. Lenders generally see those with credit scores 660 and up as acceptable or lower-risk borrowers. Higher credit scores mean you have demonstrated responsible credit behaviour in the past, which may make potential lenders and creditors more confident about your ability to repay a debt when evaluating your request for credit. There are some differences around how the various data elements on a credit report factor into the score calculations.Īlthough credit scoring models vary, generally, credit scores from 660 to 724 are considered good 725 to 759 are considered very good and 760 and up are considered excellent. These scores all have the same goal: to predict a consumer’s likelihood to pay their bills. There are many different credit score models used today by lenders and other organizations. It’s also important to remember that everyone’s financial and credit situation is different, and there’s no “magic number” to reach when it comes to receiving better loan rates and terms. While your credit score is important, it is only one of several pieces of information an organization will typically use to determine your creditworthiness. The risk might involve giving that person a loan (will they repay it?), offering a credit card (will they make timely payments?) or approving their apartment rental application (will they pay their rent?). Credit scores are calculated using information in your credit report, including your payment history the amount of debt you have and the length of your credit history.Ĭredit scores are intended to help lenders, creditors and others make fair decisions on whether or not to “take a risk” on someone. It’s an age-old question we get, and to answer it requires that we start with the basics: What is a credit score, anyway?Ī credit score is a number, generally between 300 and 900, that helps determine your creditworthiness. There’s no “magic number” to reach when it comes to receiving better loan rates and terms So if your credit score is low, work to raise it, but know that you can still be approved for that loan or that apartment while working on it.Credit scores are calculated using information in your credit reportĬredit scores from 660 to 900 are generally considered good, very good, or excellent Additionally, there are other ways that your financial responsibility is judged besides just credit score. You may never have that max credit score of 850, but there are many ways that you can successfully raise your credit score to a good, healthy number. The majority of employers and lenders look at other factors besides simply your FISCO or Vantage score in determining your approval for either a job or a loan. If you don’t have a great credit score, don’t worry just yet. While it isn’t a perfect method and can overlook some components, it generally provides an accurate enough look into your relationship with your credit cards and with your credit card payments.ĭo you pay your credit card bills on time? Are you overspending on your credit card? Have you been forced to file for bankruptcy before? These are all possible factors in determining your credit score. But, if you’re applying for housing and are worried about your credit score getting in the way, remember that other factors are taken into consideration aside from just your credit score.Ĭredit scores provide a window into your financial affairs. Sure, you should try to improve your credit score as soon as you can. So just because your credit score might be lower, don’t let that get you down. This is a great way to see if a customer will have the money in the immediate future to pay back whatever the loan might be. This will compare the amount of revenue that you make with your monthly debt payments. Lenders and banks will also commonly look at your debt to income ratio. Whatever your credit score may be, there are other factors that are considered other than credit score. Maybe they’ll combine that with your age and see that you haven’t had a ton of time yet to grow your credit score. They might look at your level of income and make a determination of your reliability in that way. If your credit score isn’t great, there are still other things that banks and lenders take into consideration. If they see a low credit score tied to you, they might think that you don’t have the ability to pay back the loan that they will give you. Low credit scores reflect your past ability to pay back credit payments. You’ll most likely be seen as less reliable than those with positive credit scores because of your history with making payments back in a timely manner, if at all. Bad or lower credit scores can increase your interest rates and hurt your chances of getting approved for certain housing or loans.
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