Stated by a credit repair company in Dallas, it’s essential to know your credit score before making important financial decisions such as applying for a car loan or mortgage. Getting a copy of your credit report shows you how lenders view your creditworthiness and reveals areas where you can improve if your score isn’t so hot.
In this article, we look at the numbers you should look for when making significant financial decisions.
General Rating Numbers
In general, a FICO or VantageScore score ranges from 300 to 850, and a score of 750 or more classifies as excellent credit. If your score is in the range of 680 and 749, it’s considered good. Now, if your score drops between 620 and 679, that’s when you’ll start feeling the effects of paying higher interest rates as your credit is considered only fair. Scores of 580 to 619 are considered bad credit and anything lower than 580 is considered poor, so avoid the last two categories to maintain financial health.
Auto Loan Numbers
Let’s say you want to get a good deal on an auto loan and you want a credit score to help you do that. The number you want to aim for is 740 or higher because according to Experian, you can snag a 4% APR or a lower rate on a new vehicle or 5.6% on a used one. If you can manage a score of 780 or higher, then you can get an even lower rate of 3% on a new car loan and a 4% rate on a used one.
Mortgage Rates
When it comes to home loans, there’s less wiggle room with the loan because of the amount you’re borrowing, which is substantially more than a vehicle, but the same principles apply; a higher score gets you better terms on the interest. For example, a score of 720 or more can get you a sub 4% range on a 30 year fixed mortgage and 760 or more can get you a rate of 3.5% or lower.
Business Loan Numbers
If you’re looking to start a business, a score of 680 or higher gives you the best chance to score a reasonable rate on a business loan, but like everything else, the higher the score, the better it is for you.
Is your score too low to get you a great business loan? Apply with Ironwood and they will get you taken care of no matter what your score is!
Existing Business Credit
If you already have a business and need credit, you’re scored differently than if you’re applying for personal credit. For business credit, FICO and VantageScore rate you on a scale from 0 to 100 and your creditworthiness is based mostly on the past credit history of your business accounts. Still, keeping your credit in good standing and paying your bills on time is the best way to boost your chances of getting more credit for your business.
As you can see, having a good credit score is crucial to having a healthy financial life, and knowing where you stand is essential to making improvements when you need to boost your score.
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