A credit score is a numerical representation of a person's creditworthiness. It is used by lenders and credit providers to assess the risk of lending money or issuing a credit card to a consumer. A good credit score is between 622 and 725, a very good score is between 726 and 832, and an excellent score falls between 833 and 1200. The higher your Equifax score, the better your credit profile and the better your appearance to credit providers.
According to ASIC financial literacy expert Suzan Campbell, it's important to look beyond your score and see your real credit report. The length of credit history counts for 15%, and a combination of accounts and new credit inquiries are taken into account at 10% each. All positive and negative acts between you and your lenders are recorded and affect your credit report and rating. The only way to negatively affect your credit report and score is to not pay and handle your finances irresponsibly. Scoring is the gold standard that financial institutions use to decide whether to lend money or issue a credit card to consumers.
In fact, about 1% of all consumers will see an 850, and if they do, they probably won't see it for long, as credit bureaus are constantly recalculating FICO scores. GetCreditScore can give you instant access to your credit report overview to help you assess your eligibility for credit products and services. FICO only reports, based on its statistics, that people with a lower score have defaulted on their loans more than those with a higher score. Equifax is Australia's leading credit reporting body with information on more than 18 million Australians, and is used by most lenders and credit providers. Alternative lenders specialize in credit products and services for people with bad credit. Only 10 percent of women surveyed and 7 percent of men said they had no idea what their credit rating was.
In some cases, people with a good credit score may be offered better loan terms, including a reduced interest rate. There are several different types of credit ratings, and your particular score may vary depending on who reviews it. A different credit reference agency can give more weight to the number of credit accounts you actually have. But what good is knowing your FICO score if you don't understand what the number on the overall reporting scale means? Maybe you have a FICO score of 740. A 1200 credit score is considered excellent by most lenders. It indicates that you have an excellent track record when it comes to managing your finances responsibly.
People with this score are likely to be offered better loan terms than those with lower scores. It also means that you have access to more financial products than those with lower scores. It's important to remember that having a good or excellent credit score doesn't guarantee that you will be approved for any loan or other financial product. Lenders will still take into account other factors such as income, employment history, debt-to-income ratio, etc., before making their decision.
