A credit score is essential if you will apply for any loan. The approval of your loan depends on your credit score. Apparently, many borrowers in North Carolina are being problematic because their credit score is low. The truth is that low credit score negatively impacts the loan potential.
Different ranges of credit score
The credit score serves as the determining factor about the ability of the borrower to repay the loan. It is calculated based on the information on your credit report including the account information, payment history, and others. This means that your credit score is the summary of both the positive and negative factors of the credit report.
Here are the different ranges of the credit score:
- Very good/Excellent- 700 to 850
- Good -680 to 699
- Average -620 to 679
- Low -580 to 619
- Poor -500 to 579
- Bad-300 to 499
What to do to improve the credit score?
If you’re planning to apply for loan or mortgage, the first thing to do is to have a good credit score. But, if your NC credit score is low, it should not haunt you because you can still improve it.
- Be diligent in paying your bills.
- Pay the full amount due each month.
- Apply for loans or credits within your means. Determine first your repaying capability prior of applying for a loan.
- Consolidate all your loans or practice the snowball method. In this method, you will repay first the smallest debt then move on to the big ones.
- Reduce the credit utilization rate. The smaller the percentage you are utilizing, the better it works for your credit score.
Indeed, the credit score affects various financial areas more than you think. In mortgages, if you have a poor credit score, most likely your application will be rejected. That’s why if you’re planning to apply for a new mortgage or re-apply, you should start fixing your credit score at least a year before your application.
Concerning a loan, the approval of your loan application would depend on your credit score. If your NC credit score is low, you should expect for higher interest rates. The credit score also applies when applying for home and car insurance. If you prefer to pay monthly, the insurance company would require you to pay upfront and charge high interest. The balance cost is spread over the agreed length of years.
Aside from checking the credit score, you can also consider determining your eligibility to apply for a loan or mortgage. This can be possible by using the eligibility calculator. You can ask help from professionals such as AmeriSouth Mortgage Company.
This company can help you not only to fix and maintain a good credit score. They can also provide ideas on how to improve your low credit score. Keep in mind that the approval of your mortgage primarily relies on your credit score. That’s why it’s important to ensure to have a good credit score to avoid possible rejection.