20 Aug, 2019

How To Get a Loan if Your Credit Score is 610

What is a Credit Score?

If you want to take a mortgage loan, get a credit card or buy a car with a loan the lender companies will require you to have a high credit score.

But first, let’s define what Credit Score means and how it works.
Credit Score is a number representing your trustworthiness and credit history.

It ranges between 300 and 850. The higher the credit score the more reliable you seem to the creditors and the less risky the idea of providing you with a loan feel. Thus, a higher number is a sign of your trustworthiness showing that you will be able to follow the agreement and pay your debts responsibly.

Monitoring your credit score is highly important, which, by the way, may change over time. The calculation of your credit score is usually based on a special algorithm. Every time when the lenders request it from the credit score reporting agencies, they choose a scoring model they prefer to receive your score in.

The following 5 components are considered while calculating the score:

  • your payment history (35%);
  • amounts you own (30%);
  • your credit history length (15%);
  • the number of types of credits you have (10%)
  • and account inquiries (10%).

Where to find your score and report?

Now, when you know what a credit score is, you need to get yours, to be able to make further, more informed decisions. TransUnion, Equifax, and Experian are some of the main bureaus where you can get your credit reports from.

Once every year, AnnualCreditReport provide your credit report for free. If you want to have them all together at once, it’s your choice. But it is advisable to take those at different times throughout the year to be able to track the changes in your score.

AnnualCreditReport.com
AnnualCreditReport.com

To sum up…

A credit score is a number that lenders rely on while making decisions about giving you the requested mortgage, credit card or a car loan. You need to always monitor your credit score and control it as much as possible.

The credit report can be taken from credit reporting agencies once a year for free and you can choose taking them all together or separately. For more simplicity, you can also check it via www.creditkarma.com which maintains fresh and up-to-date information all the time.

CreditKarma.com
CreditKarma.com

In case of having a score of 610 or worse, you need to be aware of your report strength and the factors that may affect your score. Those factors include payment history for loans and credit cards, credit utilization, the length of the credit history, types of the current credit, your overall debt and account inquiries.

Any of these can be a starting point for improving your score. Again, some smart strategies may help you increase your score. But the important thing to remember is that some changes may appear soon, but getting an excellent or even a good score is going to take a long time.

Andrei Shilkov

Blog author. I am well versed in Finance and Digital Marketing. I have two bachelors degrees, one in Computer Science and the other in Finance. Born in Russia, but later moved to the USA, to western Pennsylvania, the city of Pittsburgh.

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