The prevailing economic downturns act like a slow poison over our savings and the falling value of currencies taken away our hard earned money. Financial lending has thus become a common affair and credit cards are made available easily. Accepting the present economic scenario and getting along is the only thing we can do. But when loans form an integral part of our economy, we can stay aware about credit score charts that are readily used by banks. These charts are a measuring tool that explains an individual’s credit worthiness.
Credit score chart reports about your current credit history. This chart represents the score awarded to an individual by FICO (Fair Isaac Corporation) and few related information. According to Fair Isaac Corporation an individual’s credit score can lie anywhere within a ranges of 300 to 850 relying on the history of his credit. In other words credit score chart is an illustration that is created by the statistical analysis of an individual’s credit files. The chart thus created will explain the credit worthiness of that particular individual.
Financial institutions like banks, credit card companies actively used credit score chart to determine a loan seeker’s ability to payoff the loan within prescribed time. In case they find an individual eligible for loans, then they determine the interest rate through credit score report as well.
For an individual it is very essential to know two major aspects of credit score chart. First, he needs to know the 5 main factors that are used by FICO to determine a person’s credit score. Second, one needs to know how these main factors are determined. The primary thing one should know about credit score is that 35% of the score relies on a person’s previous record of loan payment within time. Another 30 % depends on unpaid bills, debts and outstanding balance. 15 % of the score is dependent on how long an individual is using the system of credit. Type of credit used constitutes 10 % the score determination. And the last 10% depends on the account types of an individual. According to the scores calculated by FICO individuals are granted different kinds of credit facilities.
A person’s score is considered excellent if it lies within 700 to 850. A person within this range is eligible to obtain any kind of loan and that too with low interest rate. The range of 680 to 699 signifies that an individual can have any kind of loan. Credit score between 620 and 679 is regarded as reasonable score and an individual within this range doesn’t get best interest rates.
If anyone scores between 550 and 680 then he is not granted any loan. However, there are few financial institutions that may favor such scores. Unfortunately, people scoring below 550 are not eligible for any loan.
This is the entire detail of credit score chart. Once you are aware of it, you can make arrangements to stay far off from the lowest range. In case your are stuck with bad debt and want to improve your credit score then taking help of qualified financial advisors is always recommended.