An online personal loan can be the outlet for several of your problems. You can apply online and have the answer in minutes, in some cases it may not be positive and one of the reasons may be your credit score.
Understand how credit score works and how it can influence personal loan. In today’s post, we’ll help you with this task so that the dream of having an extra buck to make up your life can come true!
What is the credit score
The credit score is a score given to each individual record regarding your relationship with the credit market. In other words, it is a numerical representation that banks and financial institutions use to know whether or not you are a good payer.
In order to do this, your debtor history, that is, the history of payment of accounts, of debts negatively (paid), your financial relationship with companies, accounts and credit cards that you have and your updated cadastral data is evaluated.
How Credit Score Scores Work
Through the analysis of the items mentioned above, each person receives a score that can vary from 0 to 1000 points. Each financial institution has its rules to evaluate the credit score, however, in general we can consider the following:
- up to 300 points there is a high risk of default;
- between 300 and 700 points, there is medium risk;
- low risk for those who accumulate scores above 700 points.
That is, the higher your score, the better your chances of getting varied credit services , such as credit card, higher overdraft limit, financing and personal loan online. Pangloss, however, takes into account several factors and can even approve customers with a score below 300.
The influence of the credit score on the loan
This is because a high credit score means that you are a good payer and therefore will fulfill your commitment to repay the loan. This gives the financial institution more security when it comes to analyzing your profile and deciding whether or not to give you the money. Often, the score will also have an influence on the interest rate that you will pay the institution.
So it is important to pay your bills on time, not to incur more debt than your pocket pays and to make good financial planning to keep your financial life healthy and increase your credit score.
Of course the credit score is not the only point evaluated. Providing up-to-date and accurate personal data is always important so that your request is most likely to be approved.