Understanding the importance of your credit score when applying for a loan may help you save money in interest throughout the lifetime of a loan agreement. In many cases, credit scores may impact how lenders will decide your rate and loan amount. While at MaxLend, people with bad credit, good credit, and no credit may apply for cash online with us, many other lenders may rely heavily on traditional credit scores to evaluate the risk of the loan. Credit scores are a combination of your credit history, income, and debt. It’s important to keep track of and protect your credit score over the years.
How Can I Check My Credit Score?
You can check your credit score with free credit checking services, such as Credit Karma or Credit Sesame. These credit checking companies offer scores, recommendations, and fraud alerts. You can use the information to help find ways to protect your credit score. Your lender may accept a credit score from these credit checking services.
What Is a Good Credit Score?
A good credit score, based on this scale, is typically anything above a 600 to 710, while anything below 566 may need some work. Many lenders rely on FICO scores, where the range is a little different: 300 to 850. FICO’s “good” credit score range begins at 670, while anything below 580 may be considered a “poor” credit score.1 Some lenders may even develop their own scoring algorithm for applicants. At MaxLend, we have our own set of loan application requirements, minimal in comparison to the eligibility criteria for most banks and other traditional lenders.
What Do Lenders Look for in a Credit Report?
Financiers view credit score reports as a way to boost their confidence that they are making a good investment. This applies to money loans by private mortgage investors and traditional bank loans. Your credit report most likely has information from one or all of the popular bureaus:
- Equifax
- TransUnion
- Experian
The data that some lenders look for may go further than checking to see if borrowers pay bills on time. They may view how many creditors have requested details about your credit, how many credit accounts are active, IRS liens, whether you have ever filed for bankruptcy, and more. Long story short, having a good credit score is a way of showing lenders you are a responsible candidate who repays your debts.
How to Protect Your Credit Score and Maintain a Healthy Credit
Unfortunately, it may be quicker and easier to damage your credit score than it is to repair it. A lower credit score can mean you may have to pay higher interest rates or you may not be approved for a loan – or that you get approved for a smaller loan amount. It is important to stay on top of your credit history and keep up with managing debt and payments. It may seem as though even one missed or late payment can deem you untrustworthy and neglectful.
If you have a bad credit score, don’t run for the hills just yet. It is possible to build up your credit score. Just maintain focus on factors that have the most impact on your credit. Making on-time payments, maintaining a low monthly balance, and utilizing your credit card responsibly will help you protect your credit score. Improving your credit score can help your financial well-being. If you check your score regularly and follow these helpful tips on how to protect your credit score, you should see an improvement in your score over time.
When you’re in need of emergency funds, MaxLend offers an alternative solution to payday loans. You can apply for cash loans online to find out if you’re approved for an installment loan of up to $3,750 with MaxLend. Compared to the eligibility criteria for most banks and other traditional lenders, MaxLend’s loan requirements are minimal. For more information about obtaining short-term installment loans, contact us by calling 877-936-4336. We’re available 24/7.
Honesty is the best policy. That’s why we encourage potential borrowers to read MaxLend reviews on Honesty is the best policy. That’s why we encourage potential borrowers to read MaxLend reviews on Trustpilot or Best Company.
Sources:
1Experian – What Is A Good Credit Score?