![]() ![]() You'll have some work to do to bring up your score over time. If your credit score is below 550, you are considered to have Bad credit. If your credit score is 550-649, you are considered to have Poor credit. If your credit score is 650-699, you are considered to have Fair credit. If your credit score is 700-749, you are considered to have Good credit. If your credit score is 750 or higher, you are considered to have Excellent credit. These ranges are the most heavily used in the industry and what you should refer to when finding out your credit score. What is Excellent, Good, Fair, Poor, or Bad?ĭifferent companies use different algorithms and methodology to calculate your credit score. Now that we have a generally understanding of what is in a credit score, let's dive into another important question. This is the 'how are the payments being made and in what installments' that banks use to predict the best way to make money from what they loan out to you. The more you open in a short amount of time, the lower your score will be because the companies won't believe you can pay them back. New Credit is essentially how many items requiring credit have you applied for recently. The longer you have had credit the more detail they can see and the more they can project your future. Seeing how much credit you are using does factor heavily into future credit scores.Ĭredit History is an indicator of time. That difference weighs into the score to determine what you will need if applying for something requiring your credit score. An example would be if you have $2,000 in debt owed, but have a limit of $6,000. Essentially it allows them to calculate how much room you have in the debt left to cover. It is whether or not you have made payments in the past.Īmount Owed is what outstanding payments you have. ![]() How is it determined?Ī credit score is comprised of your payment history, the amount already owed, credit history, new credit, and types of credit used. ![]() Remember, banks are for profit, so they want people who will drag out payments so they can collect the interest payments for a longer period of time. The credit score is the numerical value they assign to you so they can determine how much money to give you and the likelihood you'll pay them back and when. Whenever you use items like credit cards or apply for loans, you are borrowing money from either a bank or company in order to pay for something up front. What is a credit score?Ī credit score is a three-digit number that is generated using various amounts of data through an algorithm to put a numeric value on how likely it is that you are going to pay back borrowed money. ![]() We won't get into the complex aspects of what makes up your credit score in this article, but we will cover the basics and help you find out which credit score range you fall in. Credit score ranges are used to group people into buckets based on their credit score. ![]()
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