In America when you go for big shopping such as Car, boat, furniture, jewelry, home buying, buying land or for applying personal loan. Your credit score is the first thing gets checked by businesses/banks before making any decision on your credit request.
Every business, bank, and financial institution do check on every potential customer for their credit score before lending big money. What exactly is credit score? To know more about this subject, let us understand about credit score makeup Health Blog.
Credit score is a 3-digit number drawn after statistical formulas are applied on an individual consumer history. Company called Fair Isaac developed this formula and this formula is popularly called as FICO. Developed in 1970 by Fair Isaac, the score over the years has become a decision tool for financial institutions and lenders to judge the trustworthiness of a loan applicant. The higher score a loan applicant ผลบอลสด has it gives comfort zone to lenders in offering loan to borrower. The higher score cuts the credit risk for lenders.
The FICO scoring model has eight categories to classify an individuals credit health. The FICO based score ranges 350 to 850. Each range is labeled under score category.
o 350 – 499
o 800 – Above
Based on persons history and indiviual score number people are classified into excellent, good, fair, bad credit and no-credit categories. Anything below 550 score is considered having bad credit, 700 to 770 is considered good credit and above it is considered excellent. This categorization of score helps lenders to cap loan limits to applicants and keep credit card balance limits in check.