A good credit score is always important, especially when you’re anticipating buying a house, car or other large purchase that requires financing. It’s even more important to have a good credit score now with the credit crunch we are currently going through. Banks are tightening lending due to the rising number of foreclosures and delinquencies which means they are getting pickier about who they lend money to. To make sure you continue to qualify for financing – and at the best rates possible – you must have good credit.
So, what is considered a good credit score? According to Fair Isaac, also known as FICO, a credit score above 700 is considered good, a score above 750 is considered great, and anything over 800 is considered excellent. FICO scores can range from 300 to 850. The national average is approximately 680 and only 13% of people have a score above 800.
A good credit score is important because it determines what interest rate you will get when you apply for a loan, or if you even qualify for that loan. In this credit crunch, many people that would have qualified for a mortgage or car loan a few years ago are no longer qualifying. For example, you used to be able to qualify for a mortgage with a score of 500, now some mortgage lenders are requiring a score of 620 or higher to even qualify for a mortgage loan. GMAC recently announced that you will need a score of 700 or higher to qualify for an auto loan.
Even if you do qualify for a loan, you may be paying a higher interest rate. Credit card companies are taking a closer look at your payment history and how much debt you have outstanding when determining whether to extend credit and at what rates. People who have the highest credit scores will get the lowest interest rates and the best terms. What interest rate you qualify for determines how much total you will pay for a loan.
To give you an example of how a higher score can save you money, let’s look at someone applying for a 30-year fixed mortgage of $300,000. Someone with a score of 680 would pay 6.586% or $1,913 per month. Someone with a score of 720 would pay 6.302% or $1,857 per month, while someone with 760 or higher would only pay 6.08% or $1,814 per month. So a lower credit score could cost you over $1,000 per year.
You can reduce the impact of the credit crunch by taking steps to improve your credit score, or by keeping it in good shape if you have a good score already. The biggest factors that make up your score include your payment history, how much debt you’re carrying and how long your credit history is. You can improve your credit by paying your bills on time, keeping your credit card balances low, and by avoiding applying for new credit.
By: Krissi Ann
Posts Tagged ‘Payment History’
A Good Credit Score is More Important Than Ever
January 19th, 2010Posted in Article
Tags: Auto Loan Banks Buying A House Car Loan Credit Card Companies Credit Crunch Credit Scores Delinquencies Fair Isaac Fico Score Fico Scores Foreclosures Gmac Interest Rate Interest Rates Mortgage Lenders Mortgage Loan Payment History Taking A Closer Look What Is Considered A Good Credit Score
Bad Credit Computer Finance Help Speeding Up Your Processing
November 9th, 2009
Computers work as a point from where information dispenses. It has solution to every question – the question of any sort. Today in this fast moving information and technology matching of the existing speed is important. Seeing the gravity of the situation, people have started giving importance to buying computers. Due to insufficient amount of money, availing becomes some of the time a distant dream. Further problem gets more problematic for those having bad credit rating. For those, bad credit computer finance has been configured by the lending authority.
Under the provision of financing computer with bad credit, the provision enables you to get own home computer, lab, tops, desk top or other computer requirements. Financial setbacks undoubtedly can affect you life unfortunately. Hence, in all, finding computer finance despite having adverse credit is not a hassle these days many lenders are ready to work with. This financial provision not only helps you get a powerful highly sophisticated computer system, but also find way out to build up positive payment history.
Of course, it becomes a matter of concern that people unable to understand the terms of bad credit scores. Before providing you with finance for your computer, the loan provider probably checks your credit activities, and other details regarding your financial capacity. Seeing through your offered information, the lender offers you with the amount of money you requires.
For all that, money market is flood with uncountable lenders and their lending options. In such situation, finding a right lender you expects become very difficult for some borrowers. In this prospect, applying this financial provision for computer through internet proves to be a good applying tool. There too the borrowers have to give a little of their precious time. To get out of such situations, you need to select some of lenders from the sites. Go through their policies and plans, match it up with your financial viability, and then at last conclude your deal.
By: Turk Malloy
Posted in Article
Tags: Adverse Credit Bad Credit Rating Buying Computers Computer Finance Computer Requirements Computers Work Credit Computer Credit Scores Distant Dream Financial Provision Financial Setbacks Finding Computer Gravity Of The Situation Information And Technology Lab Tops Loan Provider Payment History Precious Time Question The Question Sophisticated Computer System