What are the good and perfect credit scores? It is the question asked by so many in the financial forums and websites. To be frank this question is meaningless and it can be answered depends on the purpose of asking this question.
If you want to obtain mortgage 640 credit score and 650 credit score can be thought of as good credit score. 800 credit score is very good credit score. It is called as perfect credit score.
Risks involved with various loans
Some types of loans are more risky when compare to others. If we need to say in hierarchy obtaining loans without any collateral are much risky than getting the loan with the collateral such as hard to sell. These loans are quite riskier than obtaining the car loans which in turn are riskier than getting the mortgage loans.
So obtaining each and every type of loans requires different credit scores. Higher the credit score, better the chances of getting approval for the loan.
So what is the number of bad credit score?
One of the easy ways to answer this question is, starting with the answer what is a bad credit score.
Any credit score that fall below the 650 credit score are eligible to get eliminated as not being a good credit score and these credit scores are known as sub-prime score.
Excellent credit score
Credit scores above 750 are set to be an excellent credit score. When you have this credit score and apply for a loan chances for the denial is very low. If it is denied it will be because of the factor” some loans require certain amount of regular income flow regardless of the credit score the applicant have”.
For instance regardless of the credit score you have, for the person who are making $60,000 every year cannot pay for the loan amount of 800,000 in 2 years. It will become possible only when your money is already sitting somewhere in some account.
Good Credit Scores
Credit scores ranging from 650 – 750 are considered as a good credit score. So 650 credit score is called as a good credit score.
When you want to obtain any loan without collateral you will need 800 credit score or 750+ credit score.
Even if you don’t have this credit score you can get loans but interest rate will be much higher. Normally creditors and other lenders will compensate their losses occurred on small amounts with the high interest rates.
For example if any lender provides 100 loans all with high interest rates then all of these loans will make a huge profit for them.
When it’s comes to obtain credit cards to avoid high interest rates you will need to have excellent credit score or perfect credit score (800 credit score).
During the stable economic times if you have 720+ credit score then you can buy a mortgage with just 10-20% of down payment & solid income. So as long as mortgage is concerned 720 credit score is considered as good credit score. If you have 640 credit score or 650 credit score your down payment will be much higher.
Getting a car loan is much easier than getting the mortgage because the money involved is much smaller. So if you have applied for a car loan suitable for your income having 700+ or 800 credit score will provide an easy approval.
As per the survey only 10% of the total population has the 800 credit score. If your credit score is anywhere around 750 take some necessary steps and start caring even the smaller things so that you can attain a perfect credit score very sooner.