A credit score is crucial in determining loan eligibility, terms and interest rate. The Score is a computer generated computation based on statistics of millions of borrowers, predicting your likelihood of repaying your loan. In essence, it calculates your ability to make loan payments.
For credit grantors, checking a potential borrower’s credit score is the only means to judge your creditworthiness. A high FICO score will yield hassle free lending and low interest rates. The lower your score, the more paperwork and higher the rate you will have.
In the US, FICO scores carry a value range from 400 to 800+.
Scores 420 and below means you won’t be able to get an ผลบอลสด unsecured credit card, car loan or home mortgage.
Scores of 700 and above will garner you the best interest rates and fewest fees.
5 Major Areas Where a Score is Used:
– Credit Cards
– Student Loans (private or PLUS)
Knowing your score and understanding how the number can affect your overall loan amount, is worth researching.
Your score is profound in that affects the rate of the loan and a low score can cost thousands of dollars over the period of a loan.
Mortgage Terms and Interest Points
One or two interest points can make a significant difference in the price of a home.
$150,000 Mortgage, 30 Year Mortgage Loan
+2 Points = $200 Additional Monthly
$72,000 More Lifetime of Loan
Mortgages and Credit Scores
Odds of Delinquency
780 576 to 1
700 288 to 1
680 144 to 1
660 72 to 1
645 36 to 1
630 18 to 1
615 9 to 1
600 4 to 1
585 2 to 1
How to Overcome a Low Score
– Lower debt-to-income ratio by paying off debts
– Offer a higher down payment
– Don’t purchase a car before applying for a mortgage (it lowers your credit score)
When researching for auto loans you will find advertised low loan rates are quoted for those with the best credit scores ( FICO scores of 700 or above).
Longer term loans will be offered at a higher interest rate by auto lenders. Although monthly payments will be lower, you will pay more for the total price in the long run.