This is a question that has no definitive only a direction. Why? This is because each lender makes their own decisions on who they will give a loan to and at what interest rate. So if you have a 700 interest rate you might not get the best interest rate out there and it could be different from one lender to the next. If you just looking at the facts, you will find 700 is a good credit for four reasons.
The first reason why 700 is a good credit score is the credit score scale. The rule is the higher the better and the credit score scale goes from 300 to 850. That does mean that 700 is near the top of the scale and makes it a good credit score just based on the range.
The second reason why 700 is a good credit score is based on the average American consumer. The average consumer has a credit score somewhere near 692 as reported by Experian. This means a 700 is better than half of all American and puts you in the top group.
The third reason why 700 is a good credit score is the standard of 620 used by the majority of lenders. This is usually designated as the point when you will be not accepted for a loan. If you have a 700 you should have less worries about be accepted, making it a good credit score.
The last reason why 700 is a good credit score is the default rate. If you have a 700, you are less likely to default on a loan. With the growing number of foreclosures, lenders are looking for reliable borrowers. A person with a 700 credit score is more than likely who the lenders are looking for making it a good credit score.
The name of the game is the higher the credit score the better. 700 is better than half of all American consumers, but it is not considered excellent. You should also be trying to improve you credit score. You will see benefits of lower interest rates and lower monthly payments the higher your credit score is.
The most important factor that plays a deciding role in granting you a loan is of course your credit rating. A good credit score is a magic mantra in the loan market. It can help you get a low APR (Annual Percentage Rate) with negotiable payback terms. In other words, a customer with a good credit history is a safe bet for the lender as he is sure to get his money back on time. Which makes us ask this question - is there anything like a fixed credit score?
The general consensus is that there is no such thing as a fixed credit score. As of now, it’s the lenders prerogative. If you can measure up to the lenders expectation of a ‘credit happy’ customer, then you may get all the benefits associated with a ‘prime customer’. The recent figures of application rejection have reached alarming proportions. A recent research from Moneyexpert.com reveals that over 1.30 million people have had application rejections in the last six months. This makes it a staggering 320 application rejection per hour.
Generally, an unsecured loan application faces the chance of getting rejected at the verification stage as there is no collateral attached to this particular loan type. This means that the lender has no guarantee that his principal amount would be recoverable within the stipulated loan cycle. A good credit score has more relevance if borrowers are thinking of taking out an unsecured loan. This is because there is no question of collateral involved in this transaction. The only way to check the loan seeker’s credit worthiness is by his credit score. Although, consumers take care not to spoil their credit score, sometimes missed payments happen due to lack of understanding of the lender’s terms and conditions.
In fact, the general trend shows that people who have taken out unsecured loan deals are more prone to making such errors because their homes are not mortgaged against the loan package. They feel that a small missed payment will not affect their credit scores. But, it has been noticed that even those customers having good intentions of paying back credit on time sometimes default on the monthly payments.
To overcome this hurdle, APACS, a UK payment association site has unveiled a credit card statement guide which will provide valuable tips to customers to help them understand the financial terminology used in their statements like ‘payment date’, ‘APR’ and ‘allocation of payments’. Sandra Quinn, director of communications at APACS, feels that with this advice guide, consumers will be better equipped to understand the value of frequent check of credit statements and making payments on unsecured loan deals on time.
Both Kyle Gentile & Eric Hector are contributors for EditorialToday. The above articles have been edited for relevancy and timeliness. All write-ups, reviews, tips and guides published by EditorialToday.com and its partners or affiliates are for informational purposes only. They should not be used for any legal or any other type of advice. We do not endorse any author, contributor, writer or article posted by our team.
Eric Hector has sinced written about articles on various topics from Debts Loans, Unsecured Loans and Financial Planning. The author is a financial expert in leading lending institute, currently assisting Longdog Finance to for their clients, writes imperative articles on Holiday Loans & Persona. Eric Hector's top article generates over 14800 views. to your Favourites.