Did you ask someone about credit score and he tried to explain with professional terms and finally could successfully confuse you? Then you’re in the right place, I shall tell you what a credit score is. Very curious right!
Are you wondering if you have to take an examination to get a good mark for a credit score? Obviously not! Actually, it depicts how responsible and capable one is as a financial borrower. If you are using a credit card on some purchases, the system monitors how fast you are paying back the borrowed money along with the interest. According to your behaviour, it gives you a mark as creditworthiness which is known as credit score.
A credit score ranges between 300–850. The higher the score is, the better potential customer you are as a borrower. Your credit history also affects your credit score. Actually, the lender tends to have a belief in the person that he will repay his money with a good credit score. This credit score of 300- 850 is divided into 4 parts, very curious right!
Here it goes…
- 300- 629 is a very poor score. If you have a really bad credit history, you would get it. People with this range of scores are considered to be subprime borrowers. As a result, borrowers have to keep a mortgage or have to pay more interest to the lending company. They may also require a guarantor for any borrow.
- 630 – 689 is a fair score. However, the lender may think twice before lending you the money. Make sure to increase it through several ways to have a decent score.
- 690-719 is a good score. Generally, people with no credit history or I can say a newbie would generally have this score. You can easily increase it to excellence by using credit cards more often.
- 720-850 is an excellent score. If you have it, congratulations. It denotes you have a chaste history of credit. If you ever apply for a loan, you will always get a preference and many possibilities of deduction of interest from the principal amount.
These were the minute details of my credit score.