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YOUR CREDIT SCORE AND WHAT IT MAY DO TO YOU

Those who are intending to make their initial credits may always feel hesitant and unsure. Some are unsure because of the situation being the first time and more are unsure because of their credit history. Since in borrowing cards, it is important to have a positive credit history, you should ask what is considered a good credit score.

According to the Fair Isaac Corporation, a company best known for their scoring system used by credit granting companies, there is a fair scale used in measuring the level of credit points. This system has been standardized so as to avoid the confusion that the statement ‘what is considered a good credit score for one may not be good for another’ may produce.

FICO says that 700 and above credit points can be considered very good to excellent. This means that you will have no problem in asking favors from lenders.

680 to 699 points is merely in the ‘good’ category. This also produces a very positive impression from lenders, thus, no problems can be expected. Points ranging from 620 to 679, on the other hand, are in the ‘okay’ category. If you belong in this category, chances are lenders are going to give you credits only after asking for additional documentations from you.

Points 580 to 619 will make you just a step away from belonging to the bad category. This may make you pay a higher interest rate. Points 500 to 580, meanwhile, may still allow you to gain credits but be aware that you will be paying a very high interest rate. Some even have confusing clauses in the loan agreements that might make you pay your credits at a daily basis. Points lower than 500, as expected, will generate you an astronomical interest rate. Generally, this will kill your finances in a few years.

Obviously, what is considered a good credit score falls from 620 to beyond 700. I do not think there is a need for telling twice that a good credit score is an asset, while a bad credit history can tarnish your chances. So be careful when handling your finances. Though hard, it will surely pay off.

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