Understanding Your Credit Score
As a credit holder, may you be new or veteran, have certainly wondered how the credit scores of other credit holders are doing. You would comfort yourself by thinking that perhaps they are the same as you, missing documents and lapsing due dates. Or you may feel fear while speculating about what if they are much better credit holders than you are. Yes, there are various credit holders out there. The same thing goes with credit scores
You Credit Score Must Be Better Than Subprime
Credit scores range from 300 to 850. Precise details about a credit score is not really known by many, but what people know is that the lowest credit score possible is 300, with 850 being the highest.
Majority of lenders deem 620 the bottom cut off for prime loans, the dividing line between fair and bad credit. That being said, having a credit score a bit above it may make you panic, for instance, 630. It’s still actually average, but it falls on the low side or below average. Nevertheless, a 630 score is rather more acceptable than being in the “subprime”.
This credit score would possibly be deemed a sensible credit. You won’t instantly be denied loans, but you will surely be repelling the best rates. Securing loans could also be very difficult at this certain level. The interest rates are always pretty high and the conditions are far less than ideal.
As a matter of fact, if you plan to buy or refinance a home or a brand new or used car, you are bound to have a higher mortgage rate. Thus, you are better off improving your credit score.
If your credit score marks a little above 620, you may have done some financial mishaps. This may take place if you own credit cards that are maxed out. Spending beyond your credit limit makes it even more damaging for your credit score. When your credit cards are maxed out or go beyond the credit limit, you give potential lenders the vibe that you don’t have the ability to live within your means. The money you make is not enough, so you use your available credit to get what you want or need. That’s probably what happens, or so they think. This can badly affect your score.
You should never forget that your credit score depends on all the data in your credit report. Thus, it’s a must that you always monitor it.
Related Credit Score Articles
Categories: Credit Score Articles Tags: above, above average credit score, average credit score, credit cards, lenders, limit, subprime credit score, subprime loans