What Should My Credit Score Be?
Clients often ask us what their credit should be in order qualify for finance. In order to answer this question it’s important to understand the basics of credit scoring.
A credit score is displayed on a Veda Advantage Credit Report and represents the risk profile of an applicant to a potential credit provider. Other than a bankruptcy or formal debt agreement, the lowest credit score is -200 with the highest being 1200. The lower the score, the higher the risk is considered to be by a credit provider.
A credit score can be affected by a number of factors such as a change of address, change of employment, credit enquiries and of course negative listings such as payment defaults. Once a credit score falls below a certain level it can be very difficult to secure finance.
Typically a credit provider will look at three things on a credit report when assessing an applicant’s risk profile:
- The credit score
- Past credit applications/enquiries
- Negative listings such as defaults etc.
What Does a Credit Score Look Like?
Above is an example of what a credit score looks like on a credit file. Notice how this graph is colour coded and starts with red and ends in green. The lower the score, the higher the risk is perceived to be, so it is advantageous to be as far into the green area as possible.
While only a guide, the green zone starts at approximately 600 so we always like to see people’s credit scores in excess of 600.
While a score of 600 or more does not guarantee credit will be approved, it’s clear that a credit score under 600 will most definitely represent a real problem for people trying to gain finance approval.
Effective credit repair has the potential to change people’s financial future, as when a negative listing is removed from a credit file, the credit score instantly improves as if the listing never existed.
With this in mind let’s take a look at some real life case studies of how Clean Credit has helped people regain their credit score and reaffirm their financial independence.