What Your Credit Score Says About You

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(Newswire.net — October 28, 2020) — Whenever you apply for a loan or a line of credit the lender will always check out your credit score before approving or denying your application. Applying for a loan is quite common for getting ahead when it comes to things like purchasing a house or vehicle.

If you want to know what sort of loans and credits you are capable of getting you should know what your credit score is. You can do this by obtaining a credit report API. It will help you examine your credit habits, know where you stand, and help you see what you need to work on.

What Is A Credit Score?

A credit score is used to give lenders an insight into your borrowing history. A low credit score lets them know that you may have bad habits of skipping payments or paying late, this could leave you with limited borrowing options. On the other hand, a very good credit score will tell them that you are responsible with your payment habits and opens you up to a whole new world of borrowing options.

Your credit score is a number that can be anywhere from 300 at the lowest score and 850 as the best score a person can get. Your credit score determines where you rank with lenders:

  • Exceptional Credit: 800 to 850
  • Very Good Credit: 740 to 799
  • Good Credit: 670 to 739
  • Fair Credit: 580 to 669
  • Poor Credit: Under 580

What Your Credit Score Says About You

Your credit score tells a lender whether or not they can trust you. If you have poor credit you may find yourself without any borrowing options if you run into an emergency. Whereas, if you have good credit you may see different lenders offering more competitive interest rates to get you to do business with them. Here is what your credit score is telling lenders:

Exceptional Credit

If you have an exceptional credit score it is telling lenders that you are the ideal candidate for getting a loan. This nearly perfect credit score is telling them that you have a long history of making all of your payments on time. You have a very low credit balance and have never missed a payment on it. 

An exceptional credit score means that the lenders will prefer having you to do business with than other applicants. You will most likely receive the best offers and lowest interest rates. The chances of you getting a personal loan are much greater too.

Very Good Credit

When you have a very good credit score this tells lenders that you are very responsible with your payment habits. It says that you have a good history of making your payments on time and that you keep your credit balance on the low side. You may see yourself getting some of the same offers as people with exceptional credit, but the interest rates won’t be as low.

Good Credit

Having good credit means that your credit score is above the average North American consumer. This credit score range tells lenders that you may not have a perfect credit history but you are noted as trustworthy when it comes to lending. Although you will be open to your fair share of personal loans, you may not see any of the amazing offers the two previous scores might get.

Fair Credit

If you have fair credit it tells lenders that you may have had some bad hits on your credit score, but nothing major. You may have limited options when it comes to borrowing, but should still be able to find a loan.

Poor Credit

Having poor credit tells lenders that you are a possible risk. This low credit score tells them that you have most likely had multiple missed payments from more than one provider. If your credit score is in this range you will need to make some serious changes if you ever want to borrow money.

What Your Credit Score Says About You: Final Thoughts

Your credit score is used by lenders to get an idea of whether or not they can trust you. It tells them if they should decline your application or offer you one of their more competitive rates. Speak to a financial adviser for more advice on how to improve your credit score.