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Before Applying For Loans, Be Sure The Credit Score Is Within The Credit Score Range

19 Dec

If a person wants to go to a lender and would apply for loans, especially unsecured loans, he must be sure that his credit score should be within credit score range. When a person will apply for secured loans, he might not have any problems convincing the lender to approve his loan application because lenders will only require the borrower to have his own collateral. A collateral is a sort of security that can assure the lender that the borrower is going to pay his monthly dues of his loan religiously and promptly. If the borrower can’t pay his monthly dues on time, he’s going to lose his collateral, be it a house, car or any other real property.

However, for the unsecured loans, a borrower can loan out money from a lender without any collateral. What he needs to make sure of is that his credit score is high. The credit score is a set of numbers that can tell any lender if the borrower is a good payer or not. Credit scores are based on how the borrower has been paying his past debts from institutions like banks, lenders and even credit card companies. These institutions, in turn, submit their credit score report of a particular lender to credit bureaus like Equifax. If that certain borrower will apply for loans again from different lenders, those lenders can take a look at the credit score of that person. If he has a low credit score, they might not approve the loan application. If the borrower has high credit score, then, there is no question that that lender will approve his loan application.

So, what is the credit score range? According to FICO, if the credit score of a borrower is between 730 and 850, it is considered as excellent. If the credit score is between 700 and 729, it is considered as a good credit score. If it is between 670 and 699, it is considered as average credit score. If it is between 585 and 669, lenders will consider the credit score of a borrower as average. It is a bad credit score if the credit score of the borrower is between 300 and 584.

So, if somebody wants to have his loans application approved, he should make sure his credit score is within the credit score range and it’s also recommended that he has a sort of collateral to go with it. With a collateral with high appraisal and a high credit score, for sure, his loan application will be approved and processed the soonest possible time and he will enjoy favorable low interest rates.