subject: Installment-Loan: Ensuring Good Credit [print this page] Installment-Loan: Ensuring Good Credit Installment-Loan: Ensuring Good Credit
When we think of a mortgage, or other loans known as traditional consumer loans, we are actually thinking of an installment loan. An installment loan is any loan that takes a predetermined amount of time to pay off with a specific number of payments that must be paid during that time period, usually paid at even time intervals, such as once a month.
When getting an installment loan (or any other type of loan), it is always important to have good credit to get the lower interest rates. If you have the time, it is ideal to boost up your credit ahead of time before trying to get the loan. The way to boost up your credit is to use credit on a regular basis and then be sure to pay off the required payments in full on time, but you may be wondering how you can tell when your credit is good enough.
The credit scoring system lets you determine at a glance how well your credit is, and how it will look to lenders. To impress lenders, you need to have a credit score that is, most likely, much higher than you would have ever guessed since the average credit score is a shocking 678, which seems very high to a lot of people. A credit score of over 800 is considered excellent, 750-800 is very good, 700-750 is good, 650-700 is fair, 600-650 is bad, and anything below 600 is very bad. So, you should aim for a credit score of over 800 to get the best deal and therefore, the lowest interest rate, but anything in the good and above section should get you a lower rate.
If you don't have time to build up your credit, you could always try for a secured loan, which will take your assets away that are valued at the same amount as the loan if you cannot pay back the loan. However, the interest rates will be lower, so if you feel you can pay back the loan, that would also be a good way to get a lower interest rate, and to build up your credit at the same time so if you get another loan later down the road, you will have improved credit.
