The credit score is the measure of your creditworthiness. It takes into consideration components such as your credit payment, the total number of loan inquiries, etc. Your credit score is calculated by the credit bureaus or the lending institutions. You credit score shows how you have managed your credit and loan obligations in the past and whether you will be able to meet your payments in the future or not.
Just like any other loan or credit for items or products, you can get financing for the motorcycles. It depends on the kind of bicycle you are willing to buy for yourself. Moreover, the minimum credit score required for a motorcycle also varies depending upon the different dealers and the overall value of the motorcycle.
However, you should keep in mind the minimum score that you need to finance the motorcycle. A credit score that is over 620 marks should be good enough to get the loan for motorcycle from the major dealers operating in your area. If you move to lower class of motorcycle, your minimum credit score may go down as well. It is important for you to calculate your ability to pay the loan apart from your credit score.
Explanation of credit score ranges
It is important to know the category that you fall into when it comes to credit score for you to be aware. The range of a credit score can go from 300 to 850. Always remember that the higher your score, the higher the chances of you to qualify for a loan. There will also be instances where a financing company is okay with 650 scores, while the other is fine with a 750 score. It will all depend on the lender itself.
A lender or a bank will check your credit score if you qualify for the application that you are requesting. Here are some of the credit score ranges that you should know.
Bad credit score
People with a credit score below 579 is known as high risks. Foreclosures, poor payment history, and bankruptcies are the reasons why people fall into this category.
Good credit score
A good credit score ranges from 680 to 719. People with this credit score can expect approvals and interest rates that are better.
A very good credit score ranges from 720 to 799. People with this credit score is known to be small risks, and they often get loan amounts that are higher than usual.
An excellent score ranges from 800 and above. Financial freedom is expected to people with this score.
How are credit scores calculated?
The weight of each of the five categories are; 30% of amount owned, 10% is for the new credit, 15% accounts for the length of credit history, 10% is the credit mix and the last 35% accounts for the person's payment history.
The FICO score takes into consideration positive as well as negative aspects of the credit report. The percentage or the weight of any of the categories mentioned above may differ from a person to another depending upon the information available in the credit report.
The FICO score takes all of the information from your credit report. However, the banks or any other lending institution might look at your income, type of credit and employment history when you apply for a loan or mortgage.
Once a certain lender asks for a client's credit report, they can also ask for the Fico score. Other sources say that your Fico score will include 35% of your payment history, 30% of your credit utilization, and 15% as to how long have you been borrowing.
House financing options in UK based on credit score
If you have a higher credit score, most of the banks will be willing to lend you credit or loan in the future assuming that there is little risk of you defaulting on your payments. However, if you have a credit score below 550, you may not get approved for the home loans.
With low credit score even if your loan request is approved, you will be required to pay higher interest rates and the terms and conditions for your loan and credit will also be high.