Bad Credit Loans Guaranteed Approval

Your credit score is a reflection of your credit worthiness, it is a number assigned to you by the credit bureaus based off the information they have on file for you. Most of us fixate on this number as the end all tell all to our ability to purchase a car or apply for a mortgage. While the credit score is important, it does not tell the whole story, and most banks when looking over someone’s credit worthiness for a loan application, they want the whole story not just the number.

What I mean by this is you have have two people with the exact same credit score, say each person has a credit score of 600. If they both apply for a new car loan, exact same year, model and mileage. They both have the exact same down payment amount, and they both apply for a car loan through the same bank. It is entirely possible that one person gets approved and the other person gets declined. You see what is contained within a credit report is as important as the score they get, if not more important.

Did You Know There are Two Different Types of Credit Scores?

Yes, that is right, to make matters even more confusing, there are actually two completely different credit scores. There is the FICO score, this is one that most of us are familiar with, and there is another called VantageScore. The later is used far less often and the majority of lenders are going to look at your FICO score along with the contents of your credit report, when making a decision to give you a loan.

There is actually a third score as well, this last score is called the Industry Option FICO or your NextGen score. Most of you have probably never hear of this score, and there is a reason. You as a consumer can not actually view this score. It is only available to car dealerships, this score is essentially your credit score with a few specifics related to car sales. Its possible that this score can be much lower or higher than your credit score, and you should ask to see it if you are car shopping, if it comes down to showing you this ‘secret’ credit score or losing a sale, most dealerships will just show you the Industry Option FICO.

We will be discussing FICO credit score ranges. This is the most common scoring method and used the by the majority of money lenders out there. Your FICO score is weighted by several different variables and can range from 300 up to 850. While the exact analysis and calculations to determine your credit score are kept secret, it has been confirmed that certain variables are worth more to your credit score than others. These are all approximations and not exact weighting, but should help you with understanding why you score is what it is

• ~10% – Recent Credit Inquiries – Note: I never really understood why doing credit checks actually lowered your credit rating
• ~10% – The variety of credit you have. Its good to mix it up with personal loans, credit cards, etc.
• ~15% – How long you have has those credit accounts open, the length of your credit history
• ~30% – The ration of credit to debt, also known as your credit utilization. The more unused credit you have the better – Note: While this does make sense, it is a bit backwards that the less credit you have the harder it is to actually get credit
• ~35% -Your overall history of payments. This is affected by both how many times you were late, and how late you were on the payment. Late payments are measured by the number of day you were delinquent in payments, usually 30 day blocks.

Excellent Credit Score Range 750+

If you credit score is above 750, you are considered to have excellent credit. You should be able to qualify for the best financing deals available. If you are car shopping this is usually the credit range that actually qualifies for those $0 Down 0% APR deals you see advertised on TV. You should have no problem getting anything financed with this credit score range, and often times the won’t even looks to see what is actually in your credit report with a score like this. This range you should be seeing a lot of pre-approved credit applications in the mail.

Good Credit Score Range 700-749

If your credit score is between 700 and 749, you are considered to have good credit. Rarely will someone with a credit score in this range have their credit application denied. They may not be guaranteed the best financing available but rarely will you see a decline. This is usually the lower end of what you want your score to be if you are going to purchase a house, having a good score can save you a few points on your mortgage terms, and in turn save you thousands in payments over the course of the loan. This is a good range to be in.

Fair Credit Score Range 650-699

If your credit score is between 650 and 699 you are considered to have ‘fair’ credit. In this credit range you will no always qualify for the credit terms and can end up seeing a fair amount of declines. You still can qualify for decent financing on cars and other large purchases. This is the credit range were most lenders really look into your credit report to get a picture of the whole story of your credit worthiness. This range what is in your credit report is weighted a little more heavily than your actual score. While you still may qualify for some prime rates, you credit risk at range is average to moderate.

Poor Credit Score Range 600-649

If your credit score is between 600 and 649 you are considered to have poor credit. You will see a large number of declines in this range. Depending on what is in your report you may not qualify at all. From the chart above, if you have a history of not paying on time, or if you have a large debt to credit ration (over 50%) you will have a really hard time getting approved for anything without a significant down payment. You are considered sub-prime at this point and pose a moderate credit risk.

Bad Credit Score Range 599 and below

If you have a credit score below 600 you are considered to have bad credit. You will see almost all of your loan applications denied. Most lenders don’t even care what is in your credit report at this point as you are considered a severe credit risk. You are typically limited to online payday loans, car title loans, and other bad credit lenders. The interesting thing about having bad credit, is you are actually sometimes slightly better off than those with poor credit. Bad credit loans can often have absorbent interest rates, which makes them highly lucrative from certain types of lenders. You are a high credit risk, but you are potentially a huge profit for those who are willing to lend to you, also those who get bad credit loans tend to pay in a more timely fashion to avoid damaging your credit score even further.