Find out what score ranking are available with an 804 credit score. Learn the things you can do to get a low interest loan and discover how to improve your credit score of 804
Your credit score is what largely determines whether you get credit or not and if the interest rates offered to you will be high or low. A credit score is a number that is calculated from the information contained in your credit report using a mathematical algorithm. The resulting number has three digits and ranges from 300 to 850.The information in the credit report is collected from the credit bureaus Transunion, Experian, and Equifax.
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The credit scoring system was introduced in 1989 by Fair, Isaac, and Company, currently known as FICO. Since then, the FICO model has been adopted by a majority of credit grantors and banks.
According to FICO, 90% of the most reputable and respected lenders today are making decisions based on this credit scoring system.
The following companies are the most popular companies that that measure credit scores: FICO, VantageScore, PLUS Score, TransUnion, Experian National Equivalency Score, Equifax, CreditXpert, and ScoreSense.
Credit scores are mostly used when obtaining loans, such as student loans, personal loans, car loans, small business loan and more. Landlords use credit score to determine if you can afford to rent an apartment. Insurance companies use it to determine how much to charge for coverage. Even some cell phone and utility companies use credit scores. It is used by banks, credit grantors, retailers, landlords and various types of lenders to determine how creditworthy you are.
Having good credit means that you will get any financing you need or rent any apartment you want. And when it comes to interest, you will be offered the lowest interest rates. On the other hand, having a bad credit score means that you will be denied different types of credit. Lenders will see you as a very risky borrower and will most likely not approve your loan application. Even some landlords will deny you a lease if your credit score is bad.
Is an 804 credit score good or bad?
You will find yourself among the top 2% of Americans with credit scores if your credit score is 804. With this score, you are in the range of 740 to 799, which is considered to be an excellent credit score, according to FICO.
What does being in this range mean?
With a credit score of 804, lenders are looking for borrowers just like you, meaning you won't get denied any financing you need. An excellent credit score gives them confidence in your ability to properly manage your credit since it shows them that you work hard to stay current on all your payments.
What are your financing options?
Any lender, whether a bank or credit union will be happy to get your business and will offer you a variety of loan products for your financing needs. Whether you need a boat loan, car loan, RV loan, small business loan, or any mortgage, you won't meet any serious hurdles due to the excellence of your credit score.
What financing conditions should I expect?
Many lenders have specialized loan products that cater to people with excellent credit, and you will most likely find the cheapest rates and highly-flexible repayment terms (up to 30 years) being offered to you. To them, you are a very reliable, creditworthy person who will make all their payments on time, meaning they aren't taking a huge risk with you.
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How is my 804 credit score calculated?
Lenders need to judge if you're a credit-worthy individual before they give you a loan or whatever financing you need. That is where your credit comes in handy. Most lenders look at your FICO score, since it is the most widely used credit score, to determine your credit-worthiness. The specifics of how FICO calculate the score are not known, but it all boils down to the information on your credit report. Your credit report is made up of the following components: payment history (35%), the amount owed (30%), the length of credit history (15%), new credit (10%), and types of credit used (10%).
Payment History
This is one of the essential components, and it accounts for 35% of your credit score. It shows lenders that you have the ability to pay your bills on time. It digs deeper into your payment history to see if any past problems exist, such as delinquency, bankruptcy, and collections. It also looks into the scope of the problems and the resolution time. Your score will be impacted negatively if you have too many problems with your payment history.
Amount Owed
The amount owed is another major component and accounts for 30% of your credit score. This part looks at what you still owe lenders by looking at the types of accounts and the number of accounts in your name. Needless to say that if you owe too many people a lot of money and have too many accounts in your name, your credit score will be negatively affected because this component focuses on your current financial situation the most.
Length of Credit History
A good credit history that spans years will signal to lenders that you are a sound investment compared to someone with a history of missing payments. If you've never missed a payment in over ten years, it counts as a plus when calculating your credit score. This component accounts for 15% of your credit score.
New Credit
If you are always getting credit (accumulating a pile of debt in the process), it must mean you have a lot of financial pressures that are compelling you to do so. Your credit score gets negatively affected every time you apply for new credit, and this component accounts for 10% of your credit score.
Type of Credit Used
This component of the credit score accounts for 10%. Basically, for each credit card you own, your credit score takes a hit. Someone with a lot of credit cards is more of a high-risk borrower than someone with only one.
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Explanation of credit score ranges
When it comes to purchasing something that requires borrowing money, your credit score is the three-digit number that tells lenders if you're a worthy investment or not. Whether you are applying for a mortgage, home loan, car loan or boat loan, lenders will make a decision after looking at your credit score and other information. The higher your credit score is, the more chances you have at obtaining any loan you want at affordable interest rates (the opposite being true for low credit scores).
300 to 580
A credit score of 580 and below is poor credit, and approximately 61% of people with credit scores are in this range. Credit problems or bankruptcy can lead to a credit score being this low. And if you're in this range, you will find it tough to get financing or loans at all. If you do get them, the rates might not be affordable. Since people in this range are high-risk lenders, the chances of missing or failing to make payments in future (become delinquent) are high. Rebuilding your credit when it is this low will take some time, but it is worthwhile if you want to take advantage of the kind of low interest rates that the higher credit scores get.
581 to 680
Credit scores within this range are above average and count as fair. Approximately 28% of people who have credit scores fall within this range. If you are in this range, you are considered to be a high-risk borrower and will pay interest rates that are slightly higher when you try to obtain financing or loans. The chances of you becoming delinquent in future are also high.
680 to 720
Borrowers in this range are considered to have a good credit score, and they make up approximately 8% of the population of people with credit scores. Your application for financing and loans are considered to be "acceptable," and you have a good chance of getting affordable rates when you apply for loans. There is a high chance of borrowers in the 680 to 720 range to become delinquent in future.
721 to 850
Credit scores in this range are considered to be excellent, and approximately 3% of people with credit scores are in this range. If you have a credit score that falls within this range, you won't find it hard to acquire loans, and you will get much lower rates. There is a high probability of borrows in the 721 to 850 range to become highly delinquent in future.
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What does it mean to have an 804 credit score
If your credit score is as high as 804, then you are considered to be someone with excellent credit, (850 is the maximum credit score that someone can obtain). Having this credit score means you are part of the good 2% of people with credit scores and indicates to lenders that you are a very responsible person when it comes to managing your credit. More specially, it indicates to lenders that, even though your credit score could use some fixing, you manage to make your payments on time.
What type of financing can you get?
If you are looking for personal loans, boat loans, car loan, RV loan, car leasing, conventional mortgages, FHA loans, small business loans or looking to take advantage of fallen interest rates by refinancing an existing loan, nothing should be hard for you. The likelihood that you will be denied any financing with this credit score is extremely low, and it is just up to you to make sure that you continue managing your credit well.
Are you going to get good financing terms?
There are plenty of lenders that specialize in providing people with excellent credit very affordable interest rates and highly flexible repayment terms. Even though someone with a credit score of 804 still has a slight chance of defaulting on a loan in the future, lenders don't see them as a risky borrower compared to people with credit scores of 600, 450 and 300. After all, 804 is far from 300, and lenders will be happy to get your business.
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Things you can do to improve your credit score of 804
Don't risk damaging your score
Being consistent when making your payments is very crucial. Practices such as delaying, making partial payments or even defaulting are very dangerous for your financial record. Lenders appreciate borrowers who are true to their word as this makes them trustworthy. Avoiding the mentioned practices helps to maintain good relationships that may assist in obtaining credit in the future.
This credit score category is excellent and takes work to achieve. It is advisable to maintain this score by doing all that is required. Activities such as defaulting and late payments will adversely affect you and should be avoided.
Increase your available credit
The option to reduce the number of credit cards you use and instead increase the credit card is a good move. The move raises the credit score if you are able to make the payments as agreed. Raising the limit without having a clear plan of how to make the payments may lead to more harm.
If there is need to increase the credit amount available for use, opening many credit accounts is not the way to go. It is better for your credit score to increase the limit of existing cards than getting more accounts.
Manage Credit Cards
Many people have asked how having many credit cards affect the credit score. It is okay to have multiple cards if they are managed effectively. Good management is where payments due are paid on time. This habit positively affects the credit score of the owner.
Having more than one credit card is okay. This is as long as you are able to make the required payments. Also, the payments need to be made on time. Having many credit cards and being able to manage all of them effectively creates confidence with the lenders.
Check if you linked your account to others
People link their cards with friends and family. Linking to an individual who has a bad credit score harms your financial record. It is necessary to cut off links with people who might bring your credit down. Before embarking on such a mission, ensure that the person you are connecting to has a consistent record.
Linking your account to people with a bad credit score severely affects your financial records. The individual linked to you on the other hand benefits. It is important to make sure your account is not linked to people who may harm your credit score. Regular checks on your records are advised.
Check your credit report
The credit records of an individual are the ones that are used to calculate the credit score. People should, therefore, check if the reports have a problem that may hinder the correct score from being obtained. Many errors tend to be noted in the credit scores. The most common error encountered is late payments incorrectly listed. When you find any error, it is recommended to file a dispute immediately. The dispute is submitted to the credit bureau, so that fix the problem. Regular monitoring of the credit report also helps to guard against unlawful activities. It also gives one an opportunity to make changes to the wrong information provided or may have changed to avoid trouble.
Regular checking of your credit records is commendable. However, these checks should be thorough and in-depth. Do not accept the documents as is if there are some questionable transactions listed. For example double charges, fraudulent activities and entry errors. It is important to make inquiries and ensure any errors are rectified to avoid damage to your credit score.
