It could be the case that you know what your credit score is, or you may be reluctant to find it because you are afraid to discover how bad it could be.
So don’t worry aaacreditguide.com will help you know about this so-called three digit number and if it’s terrible, then how to fix it. We are also going to give you tips how you can put back into working order your bad credit score.
Models for credit scoring
To find out that what a bad credit score actually means, you need to know the range of scores possible, and all this depends on the model you are using to find out your credit score.
FICO score is the most commonly used method to find out your credit score. This model was proposed by Fair Isaac Corporation and is chiefly used by money lenders in the United States.
The lowest point in this model is 300, and the highest is 850. It depends 65% on the payment history, and the amount of debt you have on your shoulders and 35% goes to the length of your credit history, credit mix, and credit inquiries.
One other model perhaps used is vantage score with a score range from 501 to 990 in an older version while 300 to 850 in the latest version called as Vintage score 3.0. It depends on your payment history age types of credit you have and how much of your credit limit is in use. It takes information of your total balances and debt, recent credit inquiries, and your available credit.
Credit Score: Yes, It Matters
Lenders and other creditors use your credit score to decide how likely you are to repay a loan. When your credit score is good, a lender concludes that you are creditworthy he endorses your loan application.
If however, you have a bad credit score, you will be presented high rates over more extended periods of time, following-on higher monthly payments and more cash to be thrown in the name of interest.
What is bad credit score?
A credit score below 600 is considered bad credit score. On average, an American has a credit score of about 687.
Credit score needed for personal loan
Credit score needed for a personal loan depends on the type of lender you choose and the amount of loan you are in need of. Some lenders offer loan to people with bad credit scores.
How to fix my bad credit score?
You can easily fix your bad credit score; aaacreditguide.com tells you an easy idea. You can fix your credit score by paying off all the debts to boost up your credit utilization.
If you have a lot of negative items on your credit report, it leads to bad credit score. So, you have to remove these extra items to fix your bad credit.
Having bad credit doesn’t mean that you are crooked. You still have better options available at aaacreditguide.com to get back on better financial track.