Credit is a precious commodity. Having the ability to borrow money allows us to buy things we would otherwise have to work our way up to for years. Investments such as homes, cars, and college education aren’t cheap, and we generally need credit to help us pay for them. Although credit is an important financial tool, it can also trap people in debt far beyond what they can afford to pay back. Understanding how lenders look at your credit score is therefore one of the most important financial skills you can learn.

Your credit score is a number that’s calculated based on credit history. Unlike your credit report, getting your credit score isn’t free. However, it’s probably worth the money. If you don’t know your score, you won’t know how lenders view your credit rating. If you have paid back the loan money on time, your score is gouging to be above than average score. But the problem comes when you have delayed in paying or you have not paid any amount back. There can be many reasons. But worry not even for people who have a low score of the credits, they can also enjoy and get approved for the best loan from the online TheIslandnow.

A credit rating is a general term that identifies whether you have good, excellent, fair, or bad credit. Not all lenders have the same cutoff numbers or even categorize potential customers in this way, but these are the general terms used to discuss credit. To better understand what qualifies for each of these levels, let’s break down the details.

A credit rating of Excellent usually means a credit score between 750 and 850. To achieve this level of credit requires you to have no negative credit history (such as late payments), plenty of income and assets, and a very low debt-to-credit ratio. In addition, you would need a long history of good credit and few or no recent credit inquiries to get this rating.

usually means a credit score between 750 and 850. To achieve this level of credit requires you to have no negative credit history (such as late payments), plenty of income and assets, and a very low debt-to-credit ratio. In addition, you would need a long history of good credit and few or no recent credit inquiries to get this rating. A Good credit rating is typically a credit score of 700 – 749. A shorter credit history or a few missed payments will land you just shy of excellent credit, but you will still be considered a “good risk,” and could probably qualify for a mortgage.

credit rating is typically a credit score of 700 – 749. A shorter credit history or a few missed payments will land you just shy of excellent credit, but you will still be considered a “good risk,” and could probably qualify for a mortgage. People with a credit rating of Fair customarily have a credit score between 620 and 699. Usually, when credit ratings dip down below 700, it’s difficult to get the best financing on everything from car loans to mortgages, but credit is still accessible, at a price.

customarily have a credit score between 620 and 699. Usually, when credit ratings dip down below 700, it’s difficult to get the best financing on everything from car loans to mortgages, but credit is still accessible, at a price. Bad credit is generally a credit score from 350 – 620. People with bad credit have often had serious payment delinquencies or have defaulted on one or more loans and/or credit cards. They would only qualify for subprime auto loans, credit cards, and other types of consumer credit, and would probably be turned down for a mortgage.