Nowadays, lenders have become a lot more cautious due to recent events. More than 60% of borrowers are uninsured and most of them can’t pay their debt anytime soon. The same borrowers have credit scores so low that they won’t be able to make more loans unless they put a lot of hard work into solving their debt.
However, it’s true that it’s very hard to know what is a good credit score. How can you precisely know what kind of score you must have so you can be eligible for loans and mortgages?
The scores range all the way from 300-900 and you’ll also hear that they range from 300-850 so it’s depending upon the agency that is doing the report. It goes without saying that low is bad and high is good.
So, what does that mean, exactly? Well, scores between 300 and 580 are considered to be poor and those people will have to struggle to find someone that will accept to give them a loan.
Your score depends upon the information your own credit report provides. Therefore, the better the report, the better the score.
The report consists of your payment history, all of your credit cards as well as additional information so that the lender can precisely say whether you’re a risk or not.
For your information, most Americans have their scores over 750 or somewhere in that range. Which is pretty good and pretty impressive to be honest.
However, the score doesn’t matter if you’re financially unstable. That means, a good score can just save the day you’ve lost your job or have an amazingly high debt load that will be very hard to pay off.
As a matter of fact, after your score, your lender will look at your debt to income ratio and determine precisely if you will get that loan or not.
Please note that your credit score is just a point of reference for the lender and is NOT the whole process of checking your image. If you have a good score but have a bad history with the lender, bank or just bad history with paying debt, you will most likely not get the loan.
Our advice for you so you can keep your good credit even if you are financially unstable is to avoid announcing bankruptcy. Doing so, you will ruin your credit score for good and might not be able to take it back up from there. Instead, try to invest every penny you have into liquidating those debts so you can be debt-free and focus on the more important things: getting another loan until you get a job!
Understanding a good score is not hard, but knowing how to keep it that way might be pretty confusing. What’s more, fixing a bad score can take more effort than you’ve put into bringing your good score to the top. So pay attention to your credit cards at all times and pay your debts!