Poor Credit Rating

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Credit score of individuals is made up of the past credit score along with other relevant information. On the basis of the credit score only, the lenders will sanction loan to the borrower. If the credit score is not satisfactory, then the borrower can not able to get approval of his loan application.

For estimating the credit score Fair Isaac Corporation Scale (FICO) has formulated a scale ranging from 300 to 850 .The scores are normally depend on the factors such as the credit history of the borrower, late payments, time period of the loan, loan amount, and lot more. The excellent credit score is 700 or higher. A score from 680 to 699 is considered as good score whereas 620 to 679 score comes in a fair credit range. Bad credit score is either 580 or below. Lenders assess the loan application of the borrower for determining that his or her application is a worth or not.

The various factors have to be considered for calculating the credit score. Credit reporting agencies use a predefined formula to estimate the credit score. Whatever information is given on the credit card, the formula will take into account each on of them. The score will be calculated only when the person is using his account regularly for the last six months.

So whenever you apply for loan, you should keep the above credit score ranges in mind and be disciplined to pay the loan amount on time.