Credit scores are three-digit numbers assigned to everyone over 18 years of age. Lenders use these numbers to measure our individual creditworthiness. The score takes into account multiple factors in our financial history and behavior. It considers particularly how consistent you have been with your payments on credit cards, bills, and loans. If you have a history of positive behavior, such as on-time payments, then you are to be as seen as a person who might default on a loan or credit card. You have to be responsible with your credit to be counted as one.
By the same token, if you have a missed or late payment history, then your credit score will result in assigning you a number that shows a risk of default. If you are willing to keep your credit scores high, then read on. In this blog, we will discuss what these scores mean for you and how you can keep up with them. Here you go:
Decoding Credit Scores Ranges | How They Impact You
What An “Excellent/Exceptional” Credit Score Means For You
Borrowers with exceptional credit are most likely to get approval for almost any credit card. Typically, people with exceptional or excellent credit scores are offered lower interest rates.
· How To Earn An “Excellent” Credit Score
Borrowers with credit scores in the exceptional credit range have most likely not missed any payments in the last seven years. Moreover, they will most probably have a credit utilization rate that is less than 30 percent. This means that their current ratio of credit limits to credit balances (what they owe) is merely 1:3 or better. These people also likely have a diverse mix of credit. It helps them display that many different lenders are comfortable extending credit to them.
What A “Good” Credit Score Means For You
Borrowers having a good credit score are also more likely to have a good range of loan types and credit cards available to them. Climbing up to the “very good” range might mean saving more money in interest costs.
· How To Earn A “Good” Credit Score
If you currently possess a credit score that is below the “good” rating, you might be labeled as a subprime borrower. Being labeled this can restrict your ability to get attractive lines of credit or loans. If you want to get into this range, begin requesting your credit report to see if there are any mistakes. Going over your report will show what is hurting your score and help you with what you need to do to build it.
What A “Fair” Credit Score Means For You
Borrowers who fall in the “fair” credit score might push interest rates higher for their lines of credit. This category considers factors such as poor credit utilization or delinquent payment history. Borrowers in this range might incur higher charges linked with a line of credit or loan. It can be difficult to get a 30-year mortgage at the lower end of this range. Furthermore, you might expect higher interest rates. Auto loan APRs might have credit cards, and higher rates might have higher APRs and lower limits.
· How To Earn A “Fair” Credit Score
If you are trying to get your credit score into the “fair range,” the best way would be to pull your credit report and evaluate your history. You can seek help from experts at Gifted Financial Services. If you see any defaulted lines of credit or loans or even missed payments, do your best to negotiate it directly with your lender. You might be able to come up with an agreement that permits you to make on-time and manageable payments. Getting back on track with these payments can help you enhance your credit score with our credit breeze.
As you work through meeting your debt obligations, make sure not to close any of your accounts. Open accounts with a long history that can positively contribute to your score and can continue to be used responsibly in the future. Take a look at your credit report and create a budget that sets aside money to pay off your debts. By doing so, you will learn more about how credit scores are made, and these are the basic steps in moving your credit score 651 upwards.
In Summary
That is all you need to know. The first step in your credit journey is for you to understand what a credit score is and how it impacts you. After knowing the basics about credit scores, you can start to enhance your credit score. Doing so will improve your credit card score and standing in the eyes of potential lenders. Moreover, it will also save you a lot (we are speaking about thousands of dollars) in interest payments over the course of your life. By taking strategic and careful steps to your credit history, you can see enhancements in your score. One day, you will even reach the peak level of your credit scores and be able to share tips with your family and friends. If you need any help with this, feel free to seek expert advice from Gifted Financial Services. These professionals will help you keep up with your credit scores.
