A good credit score makes transacting with loan companies and small lenders easy. As a standard measure of financial standing, it is the topmost consideration when lenders decide if they can let you borrow money from them. It’s an important determining factor that can’t be ignored.
According to Rapid Loans, a provider of fast cash loans, it difficult to get good credit scores, especially if you’re the kind with uncontrollable spending habits or who doesn’t spend too much. While it can be a little bit tricky, there are tons of credit score facts that can help get your applications approved. Below are some of them:
Credit Scoring: Bad, Good, and Excellent
Most credit scores operate on a distinct range that correlates against the labels bad, good, and excellent (or just passes or fails). The standard range of credit score are as follows:
- Excellent Credit: 750 and above
- Good Credit: 700-749
- Fair Credit: 650-699
Anything below this range needs some time to build up. Check your credit score a few months before actually applying for a loan. By doing this, you’ll have more time to improve it in case the numbers are unimpressive.
Other Scoring Models
Not all lenders are the same; some may prefer a particular scoring guide over the other. Here are some of them:
- FICO Score range: 300-850
- VantageScore 3.0 range: 300–850
- VantageScore scale (versions 1.0 and 2.0): 501–990
- PLUS Score: 330-830
- TransRisk Score: 100-900
- Equifax Credit Score: 280–850
Keep in mind that a higher score means lower risks. Lending institutions prefer loan applicants who show good numbers. They also get the best interest rates once approved.
Never assume, however, that paying your bills on time is all it takes to get a good standing. There are various factors that can quickly increase your risks, which will reduce your chances of getting an approval. Also, lenders all have their own definitions of what a good credit score is.