Credit Rating - What is It
The approval of an individual's credit loan application is greatly affected by the credit rating since some lenders use it as a basis for their decision. What is a credit rating and how does it affect your loan application?
FICO or Fair Isaac Credit Organization is the formula used to calculate the credit rating. The FICO score for these credit ratings ranges from 300 to 900 with 300 considered as high risk while 900 is considered as no risk. Usually, lenders will not approve applications with a FICO score of 500 and below. For those who grant a loan for applicants with a 500 FICO score would usually be given high interest rates. A FICO score or credit rating of 650 and above can expect an approved application with amicable terms and interest rates. A credit score of 800 will receive a very low interest rate. There are several organizations that permit an individual to check one's credit rating which is very helpful when applying for loans and other types of financial assistance.
Companies have different interpretation of credit ratings. For some, A 600 FICO score is enough for a loan applicant to qualify for lower interest fees. This credit rating may also be considered as a bad rating for other companies.
For individuals who are thinking of applying for a loan, credit scores should always be taken into account. Having a good credit rating means lower interest rates and better terms. It is recommended to have a list of prospect lenders and ask them what credit scores they require.
Bad credit ratings will not be very beneficial for individuals who are considering a loan application. Most of the time, a bad credit score will hinder the approval of certain loans, and if ever it is granted, it will come with a costly interest rate. What is considered as a bad credit score will usually depend on the standards of a particular lending company.
Here are some tips on how to improve your credit rating:
1. Start playing some, if not all, your credit card debts especially those that are way overdue. Always bear in mind that a big part of your credit score comes from your credit card report.
2. The internet can offer almost about everything and most of the time these things can be bought online with the use of a credit card. If you know that you have a bad credit score, the first step to take is to lessen your credit card use. Avoid unnecessary shopping and shopping based on impulse.
3. Another way would be to take care or pay off all missed or overdue payments. This will surely help in improving your credit rating.
Whether you are trying to apply for a loan or not, it is always good and beneficial to pay what is due in a timely manner. In instances of missed payments, make sure to find a way to pay it off. Not only will your credit score or rating be favorable, it will also save you from future problems.
FICO or Fair Isaac Credit Organization is the formula used to calculate the credit rating. The FICO score for these credit ratings ranges from 300 to 900 with 300 considered as high risk while 900 is considered as no risk. Usually, lenders will not approve applications with a FICO score of 500 and below. For those who grant a loan for applicants with a 500 FICO score would usually be given high interest rates. A FICO score or credit rating of 650 and above can expect an approved application with amicable terms and interest rates. A credit score of 800 will receive a very low interest rate. There are several organizations that permit an individual to check one's credit rating which is very helpful when applying for loans and other types of financial assistance.
Companies have different interpretation of credit ratings. For some, A 600 FICO score is enough for a loan applicant to qualify for lower interest fees. This credit rating may also be considered as a bad rating for other companies.
For individuals who are thinking of applying for a loan, credit scores should always be taken into account. Having a good credit rating means lower interest rates and better terms. It is recommended to have a list of prospect lenders and ask them what credit scores they require.
Bad credit ratings will not be very beneficial for individuals who are considering a loan application. Most of the time, a bad credit score will hinder the approval of certain loans, and if ever it is granted, it will come with a costly interest rate. What is considered as a bad credit score will usually depend on the standards of a particular lending company.
Here are some tips on how to improve your credit rating:
1. Start playing some, if not all, your credit card debts especially those that are way overdue. Always bear in mind that a big part of your credit score comes from your credit card report.
2. The internet can offer almost about everything and most of the time these things can be bought online with the use of a credit card. If you know that you have a bad credit score, the first step to take is to lessen your credit card use. Avoid unnecessary shopping and shopping based on impulse.
3. Another way would be to take care or pay off all missed or overdue payments. This will surely help in improving your credit rating.
Whether you are trying to apply for a loan or not, it is always good and beneficial to pay what is due in a timely manner. In instances of missed payments, make sure to find a way to pay it off. Not only will your credit score or rating be favorable, it will also save you from future problems.