Five Factors That Affect Your Credit Scores

742… 506… collateral, it seems like just numbers and words but these numbers and words affect your life greatly. They have to do with credit. Building up good credit and learning the steps to take to make it that way is vitally important for making purchases in life. Your credit score is a three-digit number based on a person’s credit report. Whatever your credit score is will be what lenders look at to decide how likely someone is to be a responsible borrower. An excellent credit score is 750+, good credit is 700-749, fair credit 650-699, poor credit 600-649, and bad credit is below 600. A great score can save you money by getting you the best interest rates and terms. A bad score or no credit history causes rejections, large deposit payments, higher insurance payments, and much higher interest rates. You should look at where your history falls in the range of risk and the factors that affect your score. …show more content…
Capital is what lenders look at to make sure you have the ability to make a down payment or pay for closing costs. Showing that you own a house or vehicle is what lenders will appreciate. Capacity is having more money coming in than going out. Having a steady or increasing income is what lenders like to see. Character is just being responsible. Lenders will request and take a look at credit reports. Collateral is the possessions you have that make loans less risky for the lender. So if you do not pay you may have to give the lender your collateral as partial compensation for what you owe. Conditions are if your credit score may be low but you can prove your are moving past a bad experience such as identity theft or