What is a fair / Average Loan? - News-Credit-Mortgage-Coin


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Friday, March 20, 2020

What is a fair / Average Loan?

Fair credit and average credit are largely synonymous and refer to FICO credit scores between 580 and 669. Alternatively, fair / average credit on VantageScore can refer to between 601 and 660. FICO and VantageScore are the top two credit scores in the United States. FICO was the creator of the first credit score and is still the most widely used score. Both values ​​range from 300 to 850.

FICO valuation areas
Offer category

        • 300-579                             Very poor
        • 580-669                             fair
        • 670-739                             Good
        • 740-799                            Very good
        • 800-850                            Exceptional

VantageScore ranges


        • 300-499                            Very poor
        • 500-600                            Poor
        • 601-660                            Fair
        • 661-780                           Good
        • 781-850                           Excellent

What affects your credit score?

You will be surprised to learn that your marital status and age do not affect your creditworthiness, and you are not alone when you think so. VantageScore and the Consumer Federation of America found in a survey they commissioned in 2018 that about two-fifths of consumers mistakenly believe that marital status and age affect their score, and that misunderstandings about other events are even greater.

Consumer Federation of America survey

As you can see, there are a number of events that do not affect your score. But what does it do? We noticed that late payments, bankruptcies and high credit card balances affect your score. According to FICO, the credit scores are based on the following factors and the percentage of importance for your score:

Payment history: 35 percent - If you make a payment 30 days after the due date or later, it will most likely appear in your credit report. The later the payment, the worse the impact on your credit score.

Amounts owed: 30 percent - The less available credit you use, the higher your credit rating.

Loan Term: 15 Percent - This refers to the average account age of your accounts and the age of your most recent account, which gets younger with each new account opening.

New Balance: 10 Percent - Every time you apply for a new credit card or loan, your balance will be charged with a tough request.

Credit mix: 10 percent - Different types of credit - like a car loan, mortgage, and credit card - can help your credit.

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