How To Keep On Track With A Good Credit Score
Having a Good FICO® Score makes you pretty typical among American consumers. That’s certainly not a bad thing, but with some time and effort, you can increase your score into the Very Good range or even the Exceptional range . Moving in that direction will require understanding of the behaviors that help grow your score, and those that hinder growth:
Late and missed payments are among the most significant influences on your credit scoreand they aren’t good influences. Lenders want borrowers who pay their bills on time, and statisticians predict that people who have missed payments likelier to default on debt than those who pay promptly. If you have a history of making late payments , you’ll do your credit score a big solid by kicking that habit. More than one-third of your score is influenced by the presence of late or missed payments.
Utilization rate, or usage rate, is a technical way of describing how close you are to “maxing out” your credit card accounts. You can measure utilization on an account-by-account basis by dividing each outstanding balance by the card’s spending limit, and then multiplying by 100 to get a percentage. Find your total utilization rate by adding up all the balances and dividing by the sum of all the spending limits:
| Balance | |
|---|---|
| $20,000 | 26% |
39% Individuals with a 717 FICO® Score have credit portfolios that include auto loan and 31% have a mortgage loan.
How Do I Find Out My Credit Score
ooba Home Loans South Africas leading home loan comparison service, makes this easy with their free, online prequalification tool, the Bond Indicator. You can use this to find out your credit score, as part of the process of determining what you can afford on a home loan.
Alternatively, you can contact ooba Home Loans and get your credit score and affordability verified by one of their home loan consultants.
Whats A Good Credit Score
So, what is a good credit score, anyway? Lets start at the beginning.
According to the Government of Canada, a credit score is a 3-digit number that represents how likely a credit bureau thinks you are to pay your bills on time.1 It can be an important part of building your financial confidence and security.1 For example, building a good credit score could help you get approved for loans and larger purchases, like a home.1 You may also be able to access more competitive interest rates.1
There are two main credit bureaus in Canada: Equifax and TransUnion.1 These are private companies that keep track of how you use your credit.1 They assess public records and information from lenders like banks, collection agencies and credit card issuers to determine your credit score.1
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Learn And Grow Your Credit Score
While everyone with a FICO® Score of 617 gets there by his or her own unique path, people with scores in the Fair range often have experienced credit-management challenges.
The credit reports of 41% of Americans with a FICO® Score of 617 include late payments of 30 days past due.
Credit reports of individuals with Fair credit cores in the Fair range often list late payments and collections accounts, which indicate a creditor has given up trying to recover an unpaid debt and sold the obligation to a third-party collections agent.
Some people with FICO® Scores in the Fair category may even have major negative events on their credit reports, such as foreclosures or bankruptciesevents that severely lower scores. Full recovery from these setbacks can take up to 10 years, but you can take steps now to get your score moving in the right direction.
Studying the report that accompanies your FICO® Score can help you identify the events that lowered your score. If you correct the behaviors that led to those events, work steadily to improve your credit, you can lay the groundwork to build up a better credit score.
How Your Credit Score Is Determined
All the leading credit rating agencies rely on similar criteria for deciding your credit score. Mostly, it comes down to your financial history how youve managed money and debt in the past. So if you take steps to improve your score with one agency, youre likely to see improvements right across the board.
Just remember that it may take some time for your credit report to be updated and those improvements to show up with a higher credit score. So the sooner you start, the sooner youll see a change. And the first step to improving your score is understanding how its determined.
Here are some of the factors that can harm your credit score:
- a history of late or missed payments
- going over your credit limit
- defaulting on credit agreements
- bankruptcies, insolvencies and County Court Judgements on your credit history
- making too many credit applications in a short space of time
- joint accounts with someone with a bad credit record
- frequently withdrawing cash from your credit card
- errors or fraudulent activity on your credit report thats not been detected
- not being on the electoral roll
- moving house too often.
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What Is A Good Credit Score For A Car Loan
While the four credit bureaus use slightly different scoring models, a credit score above 700-750 is generally considered good.
Here is how your credit score or CIBIL score can affect your loan approval:
|
Effect on Your Loan |
|
|
750 900 |
High chances of your requests for a car loan being approved. Additionally, the car loan approval process will be quicker, and you will also be able to negotiate the best interest rates and loan amount. |
|
600 749 |
With average or middling scores, you can still get approved for a car loan, but lenders will also look closely at other factors like income, number of existing loans, employment stability, etc. Thus, the approval process will take longer and you will likely not get the best interest rates. |
|
300 599 |
Scores less than 600 will adversely affect your chances of getting your car loan approved, and you might get rejected. However, those lenders who do offer you car loans, will offer low loan amounts and high interest rate, or request collaterals like assets, fixed deposits, etc. |
Factors Affecting The Eligibility Of Personal Loans
There are many factors affecting the eligibility of a person for personal loans. The major factors are:
- The credit profile of the applicant
- Loan amount required
- Repayment capacity/ income of the applicant
Among these, the credit profile of the applicant comprises the credit score of the applicant as well as the credit report issued by the credit rating agency. It is one of the most important considerations for sanctioning a personal loan.
Additional Reading: Personal Loan Eligibility Calculator
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Can You Get A Personal Loan With A Credit Score Of 617
Very few personal loan lenders will approve you for a personal loan with a 617 credit score. However, there are some that work with bad credit borrowers. But, personal loans from these lenders come with high interest rates.
Its best to avoid payday loans and high-interest personal loans as they create long-term debt problems and just contribute to a further decline in credit score.
To build credit, applying for a may be a good option. Instead of giving you the cash, the money is simply placed in a savings account. Once you pay off the loan, you get access to the money plus any interest accrued.
Think Carefully Before Closing Old Credit Card Accounts
If you dont use an old credit card much anymore, you might be tempted to close it.
To this we say: Not so fast. Keeping an old credit card account open can increase your age of credit history as well as your credit mix, which could help you build credit.
You might be better off keeping that old account open, assuming you dont have to pay an annual fee. You may even consider putting a small recurring charge like a monthly subscription on the card to ensure the account stays active and the credit card company doesnt close it for you.
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Measures To Improve Your Credit Score
There are several measures that will help you improve your credit score:
- Get your credit report from Bankbazaar.com.
- Review and analyse your credit report. Make necessary changes and improvements.
- Fix your late payments by paying your dues on a timely basis moving forward.
- Pay off debts instead of transferring it to other accounts.
- A good way to build a credit history is to get a secured credit card.
- Increase the credit limit on your existing credit card.
- Have a good mix of secured and unsecured loans.
- Maintain a low credit utilisation ratio.
What’s Great About An Exceptional Credit Score
Your 817 FICO® Score is nearly perfect and will be seen as a sign of near-flawless credit management. Your likelihood of defaulting on your bills will be considered extremely low, and you can expect lenders to offer you their best deals, including the lowest-available interest rates. Credit card issuers are also likely to offer you their most deluxe rewards cards and loyalty programs.
Late payments 30 days past due are rare among individuals with Exceptional credit scores. They appear on just 1.0% of the credit reports of people with FICO® Scores of 817.
An Exceptional credit score can mean opportunities to refinance older loans at more attractive interest, and excellent odds of approval for premium credit cards, auto loans and mortgages.
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Credit Score Car Loan Options
If you have a credit score of 617 or lower, getting approved for an auto loan will be difficult. If approved at all – which may not happen even with high-interest rates- your new car could end up costing double its original price before, depending on age and where in America that particular dealership is located! According to CarsDirect’s statistics about average rates across different States: 10% if buying New Auto Deals 16+Percentage Points More Than Used Car Loans!
People with poor credit who need a new car loan have other alternatives such as:
- Apply for a secured car loan where you provide additional collateral
- Get a cosigner who has excellent credit for your auto loan
617 credit score credit card options
If you want a secured credit card, make sure the deposit is at least as much of your limit. That means if someone wants a $1K secured card with no security features but just enough for today’s essentials – they’ll need to put down 1000 bucks!
If you want a credit card, your score should be at least 600. Cards with high limits and interest rates are only available for people with excellent financial records or who can afford a collateral deposit before approval!
Getting a credit card might be your first step towards building a positive financial history. You can use this wisely by using it responsibly and paying off the balance each month, carefully monitoring how much you spend on what things so that no extra fees come out of nowhere!
What affects your credit score
Make A Monthly Budget
Sticking to a budget can make it easier to stay on top of your bills. If you know how much money you can afford to spend every month, paying off your credit card and other loan balances wont feel so intimidating.
Thats important because your payment history including any late payments can have a real influence on your credit scores. Paying on time every month on accounts that report to the main consumer credit bureaus is one of the best things you can do for your credit.
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Understanding Credit Score Ranges
The credit score you see if youre signed up for TransUnion Credit Monitoring or if you purchased a credit score with your credit report is based on the VantageScore® 3.0 model. Scores in this model range from 300 to 850. A good score with TransUnion and VantageScore® 3.0 is between 720 and 780. As your score climbs through and above this range, you can benefit from the increased freedom and flexibility healthy credit brings. Some people want to achieve a score of 850, the highest credit score possible. Having this perfect score may feel like a win, but it isnt necessary to enjoy the benefits of strong credit.
In TransUnion Credit Monitoring, you may also see a letter grade with your credit score. For VantageScore® 3.0, an A score is in the range of 781850, while a B score is 720780. A score of 658719 is labeled a C. Think of these rankings and ranges as guides, not hard-and-fast rules for what good credit is. You can use them to help stay on the right track, but they dont necessarily indicate if you will or wont be approved for credit.
Think of these rankings and ranges as guides, not hard and fast rules for what good credit is.
Canadian Credit Scores And What They Mean
There is no definitive model for what certain credit scores mean to all lenders and creditors. One lender may consider credit scores of 760 to be excellent, while another may consider scores above 780 to be excellent. It all depends on what scoring model that specific lender uses and how they use it during their approval process. That being said, if youre interested in knowing what your credit scores mean, here are some general guidelines that can help.
| Range | Meaning |
| Excellent | Individuals with a rate of 760 or over may enjoy the best interest rates on the market. They also will typically always be approved for a loan. |
| Very Good | This is considered near perfect and individuals with a rate in this range may still enjoy some of the best rates available. |
| Good | An individual who has credit scores that fall within this range has good credit and will typically have little to no trouble getting approved for the new credit. |
| Fair | Scores in this range indicate that the individual is a higher risk. It may be difficult to obtain loans and if approved, they will be offered higher interest rates |
| Poor | Credit scores that fall in this range may indicate that a consumer has trouble making payments on time or is in the process of building their credit history. |
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Can You Get A Personal Loan With A 600 Credit Score
Yes, you can get a personal loan with a 600 credit score there are even lenders that specialize in offering fair credit personal loans.
However, keep in mind that if you have a credit score between 580 and 669, youll generally be considered a subprime borrower meaning lenders might see you as a more risky investment.
Because of this, youll likely pay a higher interest rate than borrowers with good to excellent credit.
Tip:
Even if you dont need a cosigner to qualify, having one might get you a lower interest rate than youd get on your own.
Here are Credibles partner lenders that offer cosigned personal loans:
If you decide to take out a personal loan, remember to consider as many lenders as possible to find a loan that fits your needs. Credible makes this easy you can compare your prequalified rates from multiple lenders in two minutes.
Ready to find your personal loan?
You can use Credible to compare rates from multiple lenders in 2 minutes. Just keep in mind, you wont be able to get a personal loan with a cosigner through Credible.
- Free to use, no hidden fees
- One simple form, easy to fill out and your info is protected
- More options, pick the loan option that best fits your personal needs
- Here for you. Our team is here to help you reach your financial goals
Learn More: How to Get a $5,000 Personal Loan
What Is The Minimum Cibil Score Needed For Personal Loans
The credit score is a 3 digit that is issued by authorised credit bureaus. It is issued on the basis of the credit history of a person and ranges from 300 to 900. A credit score of 750 or more is considered to be good by any lender issuing personal loans or any other loans. A person having a minimum credit score of 750 issued by CIBIL can get access to personal loans at relatively lower interest rates and for a higher loan amount.
Lets take a closer look at the role of a good credit score in the loan approval process.
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How Does Your Credit Score Compare
Most of the top credit rating agencies have five categories for credit scores: excellent, good, fair, poor and very poor. Each credit rating agency uses a different numerical scale to determine your credit score which means each CRA will give you a different credit score. However, youll probably fall into one category with all the agencies, since they all base their rating on your financial history.
|
628-710 |
A fair, good or excellent Experian Credit Score
Experian is the largest CRA in the UK. Their scores range from 0-999. A credit score of 721-880 is considered fair. A score of 881-960 is considered good. A score of 961-999 is considered excellent .
A fair, good or excellent TransUnion Credit Score
TransUnion is the UKs second largest CRA, and has scores ranging from 0-710. A credit score of 566-603 is considered fair. A credit score of 604-627 is good. A score of 628-710 is considered excellent .
A fair, good or excellent Equifax Credit Score
Equifax scores range from 0-700. 380-419 is considered a fair score. A score of 420-465 is considered good. A score of 466-700 is considered excellent .
To get a peek at the other possible credit scores, you can go to ‘What is a bad credit score‘.