Credit Score: An Important Aspect For Your Financial Status
Credit score in a laymans language can be defined as a scale for measuring an individuals borrowing capacity
. Usually in UK it varies from 300 to 900. And an individual having a credit score of around 720 at his end then its an average score. Generally the creditor checks the credit score of the borrower and charges the rate of interest according to it. Means a borrower having a score closer to the upper limit of the scale gets good rates while the borrower having a lower limit score usually gets the unwanted rates, as obviously they are counted to be in the higher lending risk zone. According to a study of a concerned department it is found that only 11% of the people here in UK have a beacon score above 800 while almost no one was found to be at the exact figures of 900.
And the irony is that if, during the credit check, your beacon score is found below the figures of 650 then the creditors may find issues in your credit allotment. And also the lenders will consider you as a B category client. But if you are in a bad zone of 300 to 580 then the lenders will rate you as sub-prime category client and you may have to pay really astonishing rates along with high fee for applying for any kind of loan. But they theredont worry if you find yourself in a weak beacon score, just go through the following points and consider them.
Your payment history should not exceed 35% of your score. Remember it rises with on-time payments and dips by making late payments even if by 30 days. Along with this any judgment, bankruptcy or any pending payment can create a hassle in your beacon score.