Historically, a form of credit history has four parts:
The title part for the identification of the borrower (in fact, personal data of the bank's client).
The main part, which actually represents the history of loans and their economic indicators: rate and schedule of payments. Actual payments are also recorded here, so the bulk of the story is carefully studied before giving the borrower consent to the loan.
The closed part of the history contains information about the other side of the transaction - those organizations that provided data for the formation of the borrower's credit history.
The information part gives an idea of late payments, as well as refusals to issue a loan to a specific borrower.
This form of history works in most financial institutions in the world and was formed on the basis of the workflow of the American credit history bureau, created at the beginning of the last century. More than fifty years ago, they thought about how to transfer data to electronic format. Now, the reputation of a potential borrower is determined using a number (indicator).
Personal credit score is just a number representing level risk of a lender who gives you money. There are two large-scale systems: FICO score (created by the Fair Isaac Corporation) and the Vantage Score (developed as a partnership between Equifax, Transunion, and Experian).
Consider the possible points for the first of these systems
Excellent Credit Score: 800 to 850
Beginners do not have a place here! To get the highest score, you need to get a loan, pay it off and repeat the process several times. Of course, the loan amount is also taken into account. A borrower with such a story cannot be denied.
Very Good Credit Score: 740 to 799
Over 700 are points of a person who knows how to handle his finances. Loans, rents, other important payments paid on time - all this tells the bank that. That in front of them is a man who will not let you down. As you can see, the right attitude to your obligations has many positive aspects.
Nice Credit Score: 670 to 739
For some reason, such a borrower may be denied certain types of loans. In addition, this is the usual level for the average citizen, and if necessary, apply for a loan is possible and necessary. The main thing is to maintain your positive status by subsequent regular payments.
Fair Credit Score: 580 to 669
A borrower with such a credit history may be offered a loan on less favorable terms. However, there are no obvious reasons for refusal.
Poor Credit Score under 580
An optional borrower, or a bankrupt businessman, may fall into this sad list. In another case, he will remain with his low score for ten years. Naturally, not a single bank approves a loan, therefore, to improve the situation, you will have to turn to a financial expert.
For those who have never taken loans, a point is not established. Of course, with a clean (zero) credit history, you can get a loan - it is very important to immediately strengthen your position as a disciplined payer. And then all the ways for business growth in the future will be open.