The term credit score has been tossed around and used regularly. It is just a three-digit number but is such a powerful thing that it has the ability to label you, in the eyes of financial institutions as well as many business establishments, as trustworthy or not.
This clearly sends a message that good credit score is a must-have. But what is a good credit score? How do I build my image in order for me to have it? In this article, we will tackle what a good credit score range is as well as how we can work around rebuilding our financial well-being if we have a bad credit score.
What Is Good Credit Score
Speaking of financial well-being, there are actually two institutions that are largely respected when it comes to credit score. Fair Isaac Corporation and VantageScore are the two companies whose credit scores are the ones that are largely accepted and used. The score range that they use is from 300-850.
The score that each person gets is determined by his credit history which is measured using three factors namely the amount of money he borrowed, The amount he owes, meaning the principal amount plus the interest, and lastly, whether or not he is making payments.
So, have you recently checked your credit score? If so, then you must have an idea what your 3-digit score is. But what does it mean? Let us take a closer look at the range of the scores and see where your score fits in the picture.
If your score is in the range from 300-650, it means that you have bad credit. This simply means that financial institutions and money lenders will see you as a huge risk. Therefore, you will be experiencing difficulties when applying for loans and credit cards.
If what you have is somewhere between 651-700, it is considered a fair credit. This range covers the average score of Americans. You may get approved with your card application but, be warned that you will surely be paying higher interest rates.
You have a good credit score if it ranges somewhere between 701-759. At this point, you will have very little issue getting approved for whatever loan you are applying for.
The score ranging from 761 and higher is considered excellent. This range ensures that you not only get to be approved for the loan you are applying for but you will also get the benefit of enjoying the best possible deals that the institution offers.
How to Repair Your Credit Score Yourself
Good and excellent credit scores are really awesome but the sad part is that a lot of people fall under fair and even bad conditions. This shows that majority of us are having difficulties getting our loan applications approved. If you are someone whose credit score falls under either of these two, you would be glad to know that you can actually repair your financial loans and debt history to get a better score.
Be warned, though, that this can be a long process. depending on your credit history, it could take years to rebuild your credit score. The first thing you need to do is identify what is killing your score. it could take the form of your payment history, utilization, age, and the manner or frequency of your loan application.
When you have identified the things that hold your credit score back, you need to clean up your financial loan report by disputing the mistakes made by the credit bureau. This can be tedious since you need to dispute every error separately.
Credit Cards for Rebuilding Credit
Another great way for you to rebuild your credit score is the use of credit cards. It may sound ironic that by adding credits you get to repair and rebuild your credit score. Understand that these cards have a drastic effect on your financial loan reputation and when you pay your bills on time, the effect would be very positive.
The bottom line here is to use your card responsibly by paying on time. This is what creating a positive history is all about. The good news is that there is a particular card, it is called a secured credit card, designed to help people suffering from credit problems.
It requires a deposited amount that serves as a credit limit. If the card user fails to pay on time, the bank will just take the deposit as payment so that it will not hurt the user’s history.
The bottom line to all this is being responsible in how you manage your credit. If you are responsible for paying them in time, you may not need to be bothered with having to rebuild your financial loan reputation in the future. If you want to learn more about credit scores and how you can best repair yours, visit the freescore360.com website.