More Information about Your Credit Score
When lenders decide whether or not to give you a loan or extend credit, they look at your credit score. Your credit score is a number
evaluation that lenders use to gauge credit worthiness.
The following are factors are commonly used to determine your credit score:
- Credit History
- Inquires
- New Accounts
- Outstanding Credit
- Payment History
- Pre-existing Accounts
It’s important to note that your credit score may be up to 50 points different from company to company. Typical scores are between 600
and 750, with the overall range usually falling between 350 and 850. You want the highest score you can get to secure the most favorable
credit or loan.
If you have a score of 650 or above, you can expect a favorable “prime” interest rate. If your score is between 620 and 650, you are
considered more of a credit risk, but still qualify for a good loan. You will most likely have to provide further documentation to secure
the loan however. Finally, if your score is below 620, you may qualify for a smaller loan than you anticipated, with a less than
desirable "subprime" interest rate. The difference of just a few percentage points in your rate translates into several thousand dollars
over the length of the loan. This money goes into lenders pockets instead of your own—negatively affecting your purchasing power.
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