Learn what it means to have a FICO of 618. Understand how it's calculated, what loans you can obtain, and how to better your FICO score

Fico 618: Find Out What It Means.

A credit score is needed for you to be able to get a loan or credit. The reason behind this is because it will help financial institutions to determine your creditworthiness. They will also see every loan that you made and the payment history that you have. Find out more about it by reading the information below.

Credit scores are calculated based on the proprietary algorithm. This will include the person's outstanding debts, payment history, and the length of the individual's credit history.

Credit scores can range from 300 to 850. The higher the individual's score, the lower the risk. People who have lower credit scores are considered high risk, which will make lending companies ask for more requirements.

About Fico scores

About Fico Scores

Fair Isaac Corporation is the one who established FICO, and it is one of the most commonly used credit scoring systems today.

According to FICO, 90% of the most reputable and respected lenders today are making decisions according to this kind of credit scoring system. Get to know more about Fico scores by reading the information below.

How FICO is calculated

How Fico Is Calculated

Different grade scales are used around the world, but the most commonly used system is the FICO score. FICO stands for Fair Isaac Corporation, which is responsible for calculating your FICO score.

FICO has not declared any detailed explanation on how the FICO score is calculated. However, some of the important variables considered in determining your credit score are as follows:

First and foremost, your payments are considered in calculating your FICO score. It comprises for almost 35 % of your FICO score. Next, 30 % of the score is calculated by your debts. Your length of credits accounts for next 15 %, followed by the type of credit used and some inquiries made for credit hold 10 % value each in FICO scores.

Explanation of FICO ranges

Explanation Of Fico Ranges

If you are wondering about the explanation of FICO ranges, then reading the information below will help.

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Having knowledge about the credit score is essential as this can give a huge impact on your future. Knowing your credit score will help you know the credit worthiness that you have. Here are the explanation of FICO ranges.

579 and Below

579 and below means you have a poor FICO. Lenders may require a certain amount of deposit before granting your application.

670 to 739

670 to 739 is a good FICO; wherein borrowers are considered as acceptable.

740 to 799

740 to 799 is a very good FICO; wherein borrowers can expect better interest rates.

800 and Above

800 and above is an exceptional FICO and people with this score are quickly approved of their application.

What does it mean to have a FICO of 618

What Does It Mean To Have A Fico Of 618

Do not be comfortable with a FICO score of 618. Instead, work it upwards to appeal for more and better lenders. A FICO score of 618 is below average. If you do not feed this score, you might slip below it, and that means living in the bad credit bracket for a long time.

Anything below 618 is bad credit

During credit rating, anything below a FICO score of 618 is bad. People whose FICO scores have gone above 618, but up to 640 are considered as having a poor credit rating. These individuals are way below good rating their chances of getting loans from lending institutions are still slim. However, they can acquire loans, but with high loan fees. When you have a FICO rating of 618, you are not viewed as a borrower, and that is the reason you have to work up your FICO rating to a healthier score.

Find out the status of your FICO score

If you don't have any idea about your record as a consumer, you can utilize the accompanying criteria to gauge whether you have a positive financial record. First, determine and document the length of your record of loan repayment, decide the status of your records and history of reimbursements, determine and document your aggregate obligations for credit pays, determine and document the liabilities and benefits of the kind of Visas you're utilizing. Also, consider a wide range of credit obligations that might affect your credit rating.

The dangers of your FICO score falling below 618

The bottom line which is brought about when you have a FICO report with a score below 618 is that you will not be endorsed by any lender. There is no moneylender, who wants to be associated people who are defaulting their loans. However, above 618 and way above 700, moneylenders will make you their friend.

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Credit cards with a FICO of 618

Credit Cards

There are a lot of credit cards for people with a FICO of 618 and choosing the right one is important.

Choosing the right credit card is difficult because they all look the same. But most of them come with rewards with every dollar spent. If you are having difficulties in figuring out on what card to get, then reading the information below is essential.

AEO Credit Card

AEO credit card will give you a 15% off to the first AEO purchase that you will get. It also has 20% off birthday coupon. The card has a zero annual fee.

JCPenney Card

JCPenney Card will let you earn 1 point for every USD 1 in purchases. It will also give you a 15% on jewelry, furniture, home and more. This card also has a zero annual fee.

Car loans with a FICO of 618

Car Loans

People who are applying for car loans with a FICO of 618 can expect to a not so challenging application since this score is known as fair.

Getting the loan that you need for the car that you've been eyeing is necessary for you to be able to bring that car home. Fortunately, for people with a FICO of 618, getting their loans approve is easy. But there are still things that they need to work on, to secure that loan.

Down Payment

While not all financing companies can give you your loan despite having a good score, you can offer them something to change their minds. Providing a down payment is necessary as this will mean that they only need to loan you a smaller amount of money since you have paid them a partial amount.

Choosing a Car

It would also be best to choose a car that you know you can afford. Choosing something that is too expensive can only make the financing company think twice of approving your application.

Mortgages with a FICO of 618

Mortgages

With a FICO score of 618, you fall in the average category on the grade scale. It is one of the things that will be looked at by the bank or lending institutions when you apply for a home loan or mortgage.

With this score, you can apply for government sponsored loan plans and offers. In the United States, the Federal Housing Administration's approved lenders are willing to lend you money for home or mortgage. If you can get the government loans, that is the best option for you. The government loans are easy to manage and have easier terms and conditions.

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You can also check with the banks in your area and ask them to lend you credit for your home loan or mortgage. Compared their interest rates and conditions associated with the loan and select the one offer that suits you the best.

Home Loans with a FICO of 618

Home Loans

A FICO score of 618 is considered to be an average rating. An average should get you a home loan, but you might be required to set aside some down payment and compromise on a slightly higher interest rates.

You should go to local banks and med-tier banks that would be willing to accept your home loan request with competitive interest rates.

However, you should apply for FHA-approved loans too. In 2014, a minimum FICO score of 640 was required for the borrower to get loans through FHA. However, in 2016, the policies have improved another 60 points i.e. the minimum FICO score requirement is 580. You should avail the opportunity as their terms and conditions are easier to manage. The down payment required for FHA loans is 3.5 % which you may find better than what other lenders would ask.

Personal Loans with a FICO of 618

Personal Loans

It is considered an average FICO score that could open more avenues for your financing. Lenders perceive you as reasonably responsible with your finances and may be willing to take a chance with you. The terms and rates, however, may still not be favorable.

Secured loan

You need to assure your bank that they can recover their money even when you are not able to service the loan. You are not eligible for large amounts and longer repayment periods. Chances are, you will not get a personal loan exceeding the total value of the security.

Co-signer loan

One of your colleagues can be included as a signatory to the loan. It means that they bear some degree of responsibility for the loan you are taking. When you fail to pay the loan, they are issued with warnings. In extreme cases, they may be required to foot the outstanding amount.

Payday loan

Your salary can secure you a loan with your bank. You need to have a stable source of income for you to qualify for this credit. Individuals with higher incomes are usually preferred. Besides that, if your income is small, it doesn't make sense taking a small loan that wouldn't add value to you.

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Things you can do to improve your FICO of 618

Things You Can Do To Improve Your Fico

A lower FICO score indicates that your financial management is wanting. Lenders won't trust you with their money if they are not sure it would be put into proper use. You qualify for one free credit report from the three primary credit bureaus annually, which assists you in monitoring your credit rating. A good credit score makes you eligible for higher loan amounts and lower rates of interest. Here are tips to improve your FICO score.

Dispute mistakes in your report

It is a no-brainer, errors in your credit will damage your FICO score. It is why you need to review it comprehensively to ensure all the records are accurate. In the case of errors, write formally to your creditors and the credit agencies for the mistakes to be rectified. It should be done within the shortest time possible so that you don't get denied access to credit facilities.

Increase your credit limit

By increasing our credit limit, it means your credit utilization ratio will decrease. The proportion of credit you use versus what is available must be kept below 30% for your FICO score to increase steadily. Make sure the increase is reported in your credit file otherwise your credit utilization will be indicated as high.

Bargain for the lowest interest rates

The loan agreement is a negotiated process between you and your creditor. Higher interest rates may make it difficult to meet the monthly premiums as stipulated. It means you will either be late in paying or not pay the total amount required on the due date. Consequently, your FICO score receives a battering.

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