What Are The Levels Of Credit Scores?

Each credit score fits into a different level or rating. Levels such as good, excellent and acceptable are generally used by lenders to work out where your credit score falls in terms of risk. The higher your credit score is, the more likely a lender is to approve your application, as long as your income meets your lender’s criteria. Those whose credit rating fits into the poor rating level may struggle to get a loan application approved, or have a different interest rate to those with a better credit score.

To find out more about the different levels of credit scores, read on below.

What are the levels of credit scores?

Different scoring models are used to calculate credit scores. It is important to remember that everyone’s financial and credit situation is different, which means that there is not a specific credit score number that will guarantee better loan rates and terms.

Generally, most credit scores from 580 to 669 can be considered fair, and 670 to 739 are considered good. Scores of 740 to 799 are generally considered very good, and 800 and up is considered excellent. Having a higher credit score usually means that you have been responsible for your credit in the past.

Those with credit scores 670 and up are generally seen by lenders as having acceptable or lower-risk credit. However, different lenders have different criteria when it comes to approving credit. That means that the credit scores some lenders accept may vary.

Those with lower scores, generally under 580, may fall into the poor credit category of borrowers and may have difficulty getting approved for credit or qualifying for better loan terms. However, it is possible to improve your credit score over time. By making regular repayments on time, paying your utility bills on time and not applying for credit until you need it, you may see your credit score increase.

Generally, your repayment history information may stay on your report for up to two years. Credit inquiries, payment defaults, court judgements and overdue accounts may stay on your report for up to five years, and serious credit infringements may stay on your report for up to seven years.

What are the benefits of a high credit score?

There are many benefits to having a good credit score. You may find that your applications for credit are accepted easily, or that you are offered better products from your lender. A better credit score may also mean:

Better loan terms – If you happen to have a higher credit score, you may find that you can access better loan terms than you would if your credit score was lower. You may be able to access a better interest rate and borrow a higher amount of money than you would if your credit score was lower.

An increased borrowing capacity – Banks and lenders may be willing to let you borrow more money if you have a high credit score because you have previously demonstrated that you can meet your repayments on time.

A greater chance of being approved for credit – While lenders will generally consider several factors while deciding the outcome of a loan or credit application, your credit score will generally play a big part in their decision. Factors such as your current financial situation and the type of loan you are applying for will also influence a lender’s decision.

How we can help

Try our credit score calculator today to find out your credit rating. Fast, free and safe, Tiger Finance can help you to find out your credit score at any time. If you’re looking for a loan, we can help to get you funded in four easy steps. You will have a free consultation with one of our specialists, and we will tailor-make you a loan. We will negotiate with lenders on your behalf before you are approved. Call to speak to one of our loan specialists today for your free consultation.