In today’s time it is very important to have a good credit rating. There are many who make sure that they manage to get a good credit score to make it easier for them to borrow money. Considering the fact that almost every financial transaction you are a part of will be accurately managed and handled based on the credit score you currently hold. It is definitely very essential that you do not take things like your credit score lightly. You will be accepted for loan by lenders only when you are satisfied with your credit score.
There are some standard means used to achieve a proper credit score. Most people rely on the FICO score, it is not only the most popular way that it will give you the score, but it is also commonly used by many. FICO managed to generate a unique standard cum method that will give you the desired credit score of the person in question. This score means a lot because if the score doesn’t support your statement of being in a strong financial position, then the chances are high that you won’t be awarded the loan. The scores go some way to determining the type of financial risk you are a part of.
There are many factors that are used to achieve a good credit rating score. To begin with, it is very important that your payment history is strong. This section is studied in detail. Depending on how well you do in this area, the lender can learn how capable you are in terms of paying back the money or the loan over the stipulated period of time.
The second thing that is considered are the amounts owed by the borrower. Certainly, if he cannot pay his current payments and depending on how long it takes to pay a certain sum. In addition, the type of credit that you are going to pay, all those things are taken into consideration.
Good credit rating score varies and is mentioned below.
500 – 579: Extremely low score.
580 – 619: Bad score.
620 – 659: Average score.
660 – 699: above average score.
700 – 759: Good score.
760 – 849: Excellent score.