Analysing Your Credit File: 3 steps to a good credit score

Are you interested in borrowing some funds from a financial institution? Then you should know what credit score range is, and how it will go a long way in affecting your capability of getting the loan.

It doesn’t really matter what the loan is meant, whether to buy a car, house for mortgage or any other thing. The credit score explains whether you are credit worthy or not. Below are some basic analyses of credit score range:

  • 800 or above lands you in the Elite Group. If your credit score is over 800, this means that you can negotiate for low interest rates, because you have had many years of great credit history. In fact, you wouldn’t have any issue in getting effective competitive rates for mortgage loans and insurance policies. According to the available survey, only 13% of the whole population is members of this group.
  • 700 to 800 Group. If you are within this range, you will also enjoy some low interest rates just like the elite group. This category is still viewed as an excellent range, because the lending party will most certainly perform some examinations before they will approve the low rates. Only 27% of the population falls within this category. Checking your credit score free if you’re in this range, is a great idea.
  • Between 680 and 720. Though this is a good position, but it is not seen as an excellent one. There are possibilities of meeting the criteria for loans, if you see yourself in this position. Keep in mind that you will pay a higher interest rate and it may not be easy for you getting insurance premium. I often check my credit score free if I fall in this range.
  • The 620 to 680 Group. If you are in this range, you may not see any advantage in length of loan or loan interest rate. Certainly, you may get approval for some loans, but the number of lenders that will wholeheartedly offer their services to you will be minimal. Few that may assist may do so with conditions.
  • Between 580 and 619. If you are a member of this group, then you should know that you are in a very risky group. It is below the required range, and no lender may risk giving you further credit. In fact, there is a minimal possibility of getting a loan, but if you happen to find any, their interest rates will be on the high side.
  • Below 500. You are in the danger zone if you are in this range; this low credit score sends a signal that you may be guilty of late collection, mortgage payments, a charge-off or bankruptcy. You are in great need of financial repair if you are in this unenviable circumstance. You may not find anyone that will be willing to give you loans.

Determining factors for having a good credit score

The deciding factors are simple; pay your bills as and when due. The debt to credit ratio and the length of your credit history are also great factors.