A person may find it is very difficult to get a loan because of the poor credit history and this is when the person realizes that he should know all about what is considered a good credit score. This is easier said than done, because of the various agencies that calculate the credit scores based on different criteria. This article presents the most common method of considering if a credit score is good or not good.
Credit score is very important because only if the credit score is good will the individual be able to get a loan. Loans are very important if a person is thinking of buying a house or a vehicle. These are very big purchases that need a lot of money, that the person may not have. Getting a loan is the only option to make the necessary purchase.
A person may have a good or bad credit history based on the repayment of a previous loan. The repayment history will be good if the person has been paying the necessary repayments on time and consistently. At the same time, if the individual has not been doing the repayment promptly and consistently, then the individual will have a bad credit history and this will affect the ability to purchase a new loan.
The normal credit score that is considered to be average is anything above 680. This makes the person eligible for a loan. A person who has a credit score of anything between 700 and 749 will be able to get a loan that the company might give at a lesser rate than what is given for other people who have a not so good credit history. This is because the companies that give out loans are at a lesser risk of losing their money when the loan is given to a person with a good credit history.
A person who has a poor credit history will have to pay a very high interest rate for a loan because the company will be very careful as it could lose the money that has been given as loan. A credit score of anything above 760 is considered to be very good and companies will charge a very less rate to these individuals with such good scores and they will also be willing to advance a loan with very little problems. So anything above 760 is considered to be a good credit score.