Your credit score undoubtedly plays an important role in ascertaining your future. In fact, it can help in figuring out whether you are eligible to obtain a loan for handling the stress of a financial crisis. However, you will need to pay a lesser amount for borrowing the money in case your credit score happens to be good.
On top of this, your 650 credit score will help to indicate your fiscal responsibility, and therefore it is vital to understand whether that score is good or bad. Your credit report will be looked over by somebody whenever you apply for a new credit card or loan. Apart from this, your credit will be considered by the future employers as well as landlords before they make their decision. A lower credit score will put you at a risk of making a big deposit prior to opening a fresh account or obtaining a new lease.
So is a 650 Credit Score Good or Bad?
A credit score below 650 is no doubt a poor score. Although it will not be very difficult to obtain loans with this credit score, the interest rates will be much higher. Apart from higher rates of interest, the borrowers will also be offered worse terms for all loans and credit cards. You can find out more by visiting this link.
Factors Determining Your Credit Score:
In the following paragraphs, we will talk about 4 essential factors that will help to ascertain your credit score.
1. Payment history
Payment history will comprise 35% of the credit score. Your credit score is going to be affected by how frequently you pay your bills while serious payment issues such as collection, charge-off, bankruptcy, foreclosure, and repossession can destroy the credit score significantly. Consequently, you are suggested to make the payments every month on time.
2. Level of debt
This particular factor is 30% of the credit score. Several essential factors which are associated with your debt are taken into consideration by the credit scoring calculations, and some of these factors include the amount of your overall debt, how your loan balances are related to the original loan amount, and so on. Excessive debt or having high balances can affect the credit score to a great extent. However, you can help your credit score to look better by paying down your balances.
3. Type of credit
The type of credit used by you will also determine your credit score. Although payday loans can report payments to the credit report, these sorts of loans are usually looked upon less positively as compared to car loans or mortgages. That being said, an insolvent debtor will be able to enhance his overall score with the help of secured credit cards in case he is able to show a period of making consistent payments.
4. New credit
Application for a new credit will not necessarily lead to a drop in your credit score, and it will also not drop since a copy of the credit report has been requested by you. However, you ought to be extremely meticulous while applying for a new credit. In fact, your credit score can be affected adversely if you apply for new loans repeatedly, and all these applications are turned down. You will be able to overcome your poor payment history in the past (including a consumer proposal, bankruptcy, or debt management plan) with the help of a new credit which will enable you to re-establish your credit by making prompt payments on all these new loans.
Again check out https://www.is650agoodcreditscore.com for more information regarding improving your 650 credit score.