Wondering What Makes for a Good Credit Score?
While contemplating about applying for a loan, you may have come across the term “credit score” a number of times; maybe your family mentioned it, maybe a friend did, or maybe your lender spoke about it to you. Along with the term credit score comes bad or good, and you may wonder what it all means. In order to understand the latter, it is important to know what a credit score means in the first place.
What is a Credit Score?
Credit scores can be considered to be financial points given by lenders depending upon factors like the date of repayment (if a borrower has repaid a loan on time or not), whether or not a borrower has repaid the loan at all, and if the borrower is in debt to multiple lenders.
When you apply for your very first loan, you go with a background of having no credit rating at all. There is a 50-50 chance of you getting funded if you have no credit score, since some lenders may still be reluctant about providing loans to new borrowers.
Are You a First Time Borrower? Here’s Is Where you can Get Funded
If you want to begin your loan borrowing process, you can always choose to apply for a loan with a direct loan lender. Reason being that many traditional lenders prefer avoiding the risk of offering funds to new borrowers, since they come with no credit history whatsoever which means that the lender has no way to be sure about whether or not such a borrower will repay a loan. Traditional lenders depend on credit ratings in order to provide their borrowers with funds, which is why getting finances from them if you’re just beginning your loan borrowing journey can be fairly difficult.
Now, let’s come to the part that we’ve all been waiting for- what is a good credit score after all?
Good Credit Ratings
If you don’t default on repayment, which means that if you repay your loan on or before the due date you will achieve a good credit rating. According to FICO, a good credit score lies anywhere from 670-739 points on the credit score sheet. If you land a credit rating between 740 and 799, your credit rating shall be considered to be very good. If your credit rating is 800 or above, you have an excellent credit score.
The difference between these credit ratings is that the better your credit rating, the more likely it is for you to receive funds and at a lower rate than what others may receive.
If you have a good, very good or an excellent credit rating, you shall get funded by majority lenders since most of them accept these ratings.
Bad Credit Ratings
Unlike good credit ratings, bad credit ratings as the name suggests are considered to be “bad”. If you’re a credit score holder who possesses a bad credit score, funding for you can be fairly difficult. Majority traditional loan lenders do not fund those borrowers who go to them for help, but have bad credit scores. A bad credit rating indicates that you haven’t been repaying your loans on time, or haven’t been repaying them at all.
No lender wants to be at the receiving end of not being repaid which is why they avoid offering funds to borrowers who have bad credit scores. Even if they do, they usually tend to offer smaller amounts at higher rates.
So, where can you find a loan while having bad credit?
If you have bad credit but still need funds, you can always choose to approach a direct loan lender like InstallmentLoanz. Our rates of interest are affordable and we offer funds to bad credit holders since what we rely on is not one’s credit score. Instead, we expect our borrows to have stable monthly incomes depending on which we shall decide whether to fund them or not. How much you shall receive will depend on how much you earn though.
Our loans are designed to make repayments easy for you which means that unlike payday loans, our short-term installment loans come with flexible repayments; our loans have to be repaid in parts over the course of a few months, unlike payday loans that have to be repaid in lump-sum on your next consecutive pay date.
So, if you’re looking at borrowing funds for the first time or have bad credit, rest assured that you can rely on us to provide you with the money that you need.