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It’s no secret that we live in a money-driven world. Money is the answer to our present and future plans, to our desires and accomplishments, but most of all – money is the key to our financial stability. Therefore, it comes as no surprise that credit applications have become the first step we take whenever engaging to one of these personal projects be it an apartment rental, college taxes, new car or any other acquisition. Unfortunately, to most people, credit remains a mystery. They show up armed with application forms, leaving everything else to chance. However, what most people tend to forget is the fact that money and particularly, money obtained from loans or credits has nothing in common with chance or hazard. Of course, they do remember this fact, but only when it’s too late and they have already succeeded in obtaining huge interest rates credits or more exactly bad credits. Thus, to avoid this situation and its unforgiving consequences on your budget, you should start by finding out what is considered good credit and its benefits. Well, to begin with good credits are usually granted to individuals who treat their credit payments and finances responsibly. What does financial responsibility represent? For starters, this involves full payments made on time. Needless to say, the image is far more complex and it involves vital factors like: clear payment history that has registered no delinquencies or inconsistencies, length of credit history, new credits opened recently, types of credit, credit utilization or the ratio of current revolving credit card balances. Good credits are obviously determined by good credit ratings, an aspect that leads us to the next natural question: what is a good credit rating? In general, credit score or credit ratings can be defined as numerical expressions that are generated by a mathematical algorithm based on your credit report files. This equation was designed to predict risk, and specifically, the likelihood that you will pay or not your debts. There are many credit-scoring models available on the market, but there is only one that dominates the system - the FICO credit score. According to this system, every three digit number qualifies a person for a certain type of credit. Thus, an excellent credit is any score of 730 or above, good credit score is a notch below ant it ranges from 700 to 730, an average risk credit is one delimited by 670-699, a higher risk credit is summed up in the 585 and 699, and naturally, a poor credit lies below 585. Furthermore, credit scoring is widely accepted as the primary method of assessing the creditworthiness of a person when applying for loans. If the answer is affirmative, this score rating will be used in setting customer’s interest rates and credit limits. In conclusion, a good credit score can make the difference between being denied or approved for credit, and most important, between high interest rate credit and fair interest rate credit. The good news is that today, you can explore this complex field in depth by simply engaging to an online quest. These resourceful websites can act as online financial advisers that will later on, have a great impact on your future credit score rating and on your future budget as well. In fact, one of these sources is goodcredit.com. Please visit goodcredit.com to learn more about what is considered good credit or about what is a good credit rating.
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