A credit score is a three digit number based on your credit report. It gives a good picture of your credit worthiness. An excellent credit score makes you qualified for low interest rates. You are not as much as a risk to lenders. A bad credit score, on the other hand, means you will have to pay higher interest rates. It means you have had some trouble in your past and your credit history shows this. Lenders will think you are a risk.
A credit score ranges from 300-850. You can go to any credit bureau and purchase your credit score. Check to see where it falls and whether or not you need to increase your score. Here is a breakdown of the scores and what they mean:
Your score is 700-850. This is an excellent score. At this tier lenders will give you the best rates on mortgages. Not only that you will be favored by banks but you will get major credit cards with very low live score interest rates. Having an excellent credit rating will gain you favor in consumer loans, insurance and employment.
Your score is 680-699. This is a good score. If your credit score falls on this tier you will still receive normal loans from lenders. At this tier you will still receive favorable terms from financial institutions.
Your score is 620-679. This score is fairly acceptable. At this range you will land that loan approval but on a higher interest rate. If you fall under this tier it is good to consider ways on improving your credit score. You have to look into your credit report and see where you have to work on. Paying off your debts and controlling your credit card use may boost your credit score.
Your score is 580-619. This is a low score. You are at the brink of having a bad score. At this tier you will have to wrestle with very high interest rates. You may land on that approval but on the money lenders terms.
Your credit is 500-580. This is a bad score. At this tier you won’t like the terms that money lenders will give you. You may consider repairing your bad credit.
Below 499. This is a very bad score. But don’t despair, ad credit can be repaired.