Credit scores are useful tools for measuring how worthy of credit individuals are.
Factors used to calculate:
- Accumulated amount
- Length of credit
- Repayment history
Both qualitative and quantitative factors are utilised by bureaus, which will collect data about credit repayments. It summarises the details appearing in your report.
What the different credit scores mean:
750 +: This is an exceptional score. With impeccable repayment behaviour, one is regarded as an overall low risk debtor.
740 +: These people are financially responsible, typically making timely payments, along with low credit utilisation.
670- 739: People benefit from competitive rates with such as core, because it is good. You may still experience a tough time qualifying for other kinds of credit.
580- 669: With this average score you aren’t likely to benefit from the best rates.
580 and less: This is a bad score and is damaged. At this stage, one should be focusing on repairing it.
Understanding what the different credit scores mean will enable you to get the best rates, after working on improving or maintaining it. When intent on home loan approval, then you would need a clear understanding of your status.
If there are mistakes on your report, this will undoubtedly have an effect on this value, so it’s vital to monitor it regularly. You can get them corrected urgently.
If find out that you have a poor score and you have no knowledge of missed payments and judgements made against you, there may be a case of identity theft involved. If there is suspicious behaviour on your credit report you should investigate it so that it can be corrected before any more damage can be done.