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Ever wondered what a credit score is? Do you wish to check your credit score? Here are the details about what a credit score is and its categories.
A credit score is none other than a number representing the creditworthiness or eligibility of a person, the probability of a person that he would pay back his or her debts.
Money lenders such as banks, credit companies, and financial companies’ etc use credit scores to examine or evaluate the risk posed by providing credits to the customers. Lenders state that the use of credit scores has made the credit more available to the customers.
Most credit card companies fix or categories the benefits of the credit cards based on the credit points the consumers have. Generally, the credit scores range from 300 to 850. These scores are calculated based on the consumer’s ability and discipline in repaying the debts to the money lenders. Credit cards issuers have categorized into different categories from bad to excellent. These categories generally look like:
Excellent Credit: 750+
Good Credit: 700 – 749
Fair Credit: 650 – 699
Poor Credit: 600 – 649
Bad Credit: below 600
What is a good and bad credit score?
Generally, credit scores operate within the range of 300 to 850, and a good credit score of 700 and above is considered to be a good credit score. But even these are not set as standard. This is because as mentioned earlier credit card lenders vary their definitions of the good and bad credit score to acquire more customers. A lender that requires more borrowers might approve applicants that range from 600 as good credit and the other lender might be more selective and approve applicants with a score of 750 or higher.
It is a duty of the consumer to maintain a good credit score. A good credit score can be easily maintained by paying back the debts correctly without any delays. You can also find the tips to increase your credit scores.