Learn key information about a credit score of 477 how it's calculated, what loans you can obtain, and what you can do to improve your score
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
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 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.
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.
What does it mean to have a credit score of 477
A FICO score of 477 is not a good rating. There are different ways to look at credit score and determining whether an individual with this score has a good or bad rating. It is crucial to determine whether you are using the Fico, Experian, Equifax or Transfusion credit score measure. All these agencies have different variations of rating your credit score, but these credit scores are not distinct from each other. According to FICO rating, a credit score of 477 is still a risk factor for giving credit to customers with a credit with a credit score of 477. 477 and below is a very bad credit with a high risk, and lenders will still avoid lending individual with the score.
Can you fix a credit score of 477?
You can fix a credit score of 477. You don't need to file for bankruptcy. A 477 and you feel like you've done everything necessary for your credit and are still categorized as bad, you need to take time to check on credit history errors. On the other hand, some errors are non-intentional and occur simply because of systems which are not updated. Errors only need to be corrected through following relevant companies that owe you a positive credit report. Bankruptcy is also not a good solution for repairing your credit. Whenever you have a situation that demands your file bankruptcy, do it the last thing, but try other credit score revision methods.
Duration it takes to improve your 477 credit score
The standard improvement time for your credit score depends on how bad your credit is. Those with 477 credit score need approximately three years to improve their credit score to at least 600. This rate of improvement requires commitments. If you have such rates, consider using banks to try and improve your credit and update your credit history from all institutions that deal with finances. Checking your accounts responsibly and giving more time to financial education will help you maintain a FICO of 477 and above.
Credit cards you can get with a credit score of 477
People with a credit score of 477 may have a hard time looking for a bank that will approve them their credit card request. Fortunately, there are still banks that cater to people with a low credit score.
Not all banks may approve of your credit score when applying for a credit card. If you are one of the many who are looking for banks who will cater to people with low credit score, then the information below will be useful.
First Progress Platinum Prestige Secured Card
This credit card doesn't need a minimum credit score for them to approve you. Since it is a secured credit card, the bank will require you to deposit a minimum of USD 200.
Bank of the Cascades Secured Card
Bank of the Cascades offers a secured credit card to people with low credit score. This card has an annual fee of USD 35.
Car loans with a credit score of 477
Some people who are asking for car loans with a credit score of 477 are having a hard time getting approved. A credit score of 477 is low, which is why most financing companies are declining their application.
Fortunately, there are still some other financial companies that can provide you with the car loans that you need. It won't be very easy to find these companies, but with the right mindset, you will eventually find one that will cater to your needs.
There are a lot of online lenders today that can help you with the car loan that you need no matter how poor your credit score is. All you need is a working computer and a good internet connection for you to be able to start looking for them. Of course, it would be best to read testimonials from their previous and current borrowers, for you to know if that is the company that you need.
Shop for Loans
Having a low credit score doesn't mean that you no longer have the right to shop for loans. You still have that right and by shopping for different loans, it will help you to get an idea as to which company can give you the lowest possible rate that is within your budget.
Mortgages with a credit score of 477
If you have a score of 477, you will find it difficult to get mortgage or home loans. However, this does not mean that you are out of options. In fact, there are a number of approaches that you may adopt to get your home loan or mortgage.
You should avoid major banks; you should be applying for a mortgage from local and small scale banks. There is a higher probability that they will be willing to lend you credit for your mortgage. However, they might charge you higher interest rates and their conditions would be strict with respect to your payments.
You can also have a look at the local credit unions. You will have to apply for membership with a credit union before you can ask for a mortgage or any other sort of credit.
Home Loans with a credit score of 477
Getting home loans with a credit score of 477 can be difficult but still possible.
Some people find it difficult to get home loans with a credit score of 477. The good thing is, lenders can still consider you for one. Here are some of the tips on how you can still get approve no matter how low your credit score is.
Informing Your Broker
You need to inform your broker that you have a poor credit score. The reason behind this is because your agent can help you look for a lender who can accept your application no matter what your score is.
Fix Your credit score
Another thing that you can do is to fix your credit score by paying your bills on time. You also need to check your credit report every six months to make sure that there are no discrepancies that can further hurt your credit score.
Personal Loans with a credit score of 477
Just because you have a poor credit score doesn't mean you can't have access to a personal loan. There are several personal loan services available for people with bad credit. All you need is to know where these loan services can be accessed. Here are top two services you can rely on in the United States.
Springleaf Financial (http://www.thesimpledollar.com/go/t0652/):
This service provides you with secured and unsecured personal loans ranging from $1,500 to $10,000. It is friendly to individuals with a credit score of 600 and below. It is available in 41 states with over 800 branches to serve you.
You can get a personal loan from this service if you have a cosigner who has a good credit score. A major advantage is that they provide you with a grace period if you fail to pay promptly. Your co-signer is issued with warnings to minimize damage to their credit score.
Things you can do to improve your credit score of 477
You still have the hope of improving your credit score of 477 if you take proactive steps. Showing signs that you are exponentially trying to improve your financial status through prompt credit repayments ensures your rating gets a constant boost. Even if you have bad credit, financiers will view you positively if you are making an effort to improve on it.
Paying your bills on time
You don't need to wait until the last minute or after being reminded by the financier for you to repay the loan you have taken. You take a loan voluntarily. Therefore, you are expected to be responsible for it. Show good faith by paying it on time and through the proper channel.
Avoid altering payment plans
Missing your payments or reducing hem suddenly affects your credit score negatively. Other practices that could damage your rating include taking cash advances, using your credit card for activities that show present or future financial constraint like in pawn shops.
Planning before seeking credit
You should plan for the future before applying for credit. It is recommended to take credit in a lump sum rather than doing individual, periodical applications for every need. Your credit score takes a slight dent every time you apply for credit.