Excellent Credit Score:
In the range of 750 and 850, you’ll find “great” credit scores. People with outstanding credit histories often have at least $10,000 in available credit, no late payments, and no bankruptcies in their past 15 years. The likelihood of a loan default is reduced if the borrower has a high credit score. You can save money in the long run if you rent instead of buy because you won’t have to put down as much money up front and you’ll get better mortgage rates.
Good Credit Score:
Between 700 and 749 is considered excellent credit. A strong credit score indicates that a person has paid their bills on time for the past year, has a credit limit of $5,000 or more, and has not made any late payments in that time. Even if a borrower with a high credit score is a safe bet, they may still be required to show further reliability by providing evidence of things like income and employment stability. Even with the room for improvement, you will still be able to qualify for a mortgage at a reasonable interest rate and borrow a reasonable amount.
Fair Credit Score:
A credit score of 650 to 699 is considered good. Persons with fair credit scores often have one or more open lines of credit totaling less than $5,000 and have been late on payments no more than once in the past 12 months. Any borrower with a credit score in the “fair” range raises certain red flags for the lender. It indicates that you have a high debt-to-credit ratio or that you have had trouble making your payments in the past. To avoid paying higher mortgage rates and deposits, your credit score needs to be raised from this point on. If you want to increase your credit score, ask your bank for a larger line of credit and pay on time every month.
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