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Credit Rating vs Credit Scores

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Credit Ratings vs Credit Scores have major similarities and differences in the sense that they are each quantified assessments of the creditworthiness of the borrower with regards to financial obligation. These financial obligations sre considered credit borrowed from a financial institution under terms and conditions that the due payment is paid at the end of a set period of time. These credits ratings and credit scores using a credit card has most certainly redefined the industry of financial products.

What is the Major Difference between Credit Ratings and Credit Scores?

The major difference between credit ratings and credit scores is essentially their definitions. A credit rating is an analysis of every credit risk affiliated with the entity such as a business or government and is completed through a financial institution. A credit rating is expressed through a letter grade system such as Triple-A, Double-A, Triple-B, Double-B, and continues on until reaching D which is Default. On the other hand, a credit score is generally a 3 digit expression of an individual’s creditworthiness. These digits range from 300 to 900, the higher the better the credit score. Generally, the Premium Credit Bureau provides credit solutions for both credit rating and credit score difficulties.

What is considered a reasonable Credit Rating vs a Reasonable Credit Score?

The differing attributes of credit ratings and credit scores are measured for the same purpose - creditworthiness.  A reasonable credit rating ranges from Triple-A to about Triple-B for proper credit approval. Meanwhile, what does your credit score start at? It is simple. Credit score ranges are between 300 and 900 with an 800 credit score being considered highly approved such as for a home loan or a car. A 600 credit score will land an individual a phone contract or a store credit account. 

What are the Factors for Determining Credit Ratings and Credit Scores?

There are four key factors considered when determining a credit rating or credit score. Quite frequently, everyone asks, “why did my credit score drop?” This includes repayment history, current total debt, types of loans, and the length of credit history. In addition, credit reporting agencies consider how late your previous payments were paid and whether a payment was missed/skipped. Credit reporting agencies will also consider how many inquiries were made on your personal or business credit profile.

How do Credit Ratings and Credit Scores help Consumers in the Long Run?

Credit ratings and Credit Scores that determine credit worthiness demand consistency. In the long run, these quantified assessments determine a consumer’s financial ability to provide and prosper, whether it is within their business or personal life. With excellent credit ratings and credit scores, your credit limit will increase to unlock many savings and benefits. To get a free credit score/rating online, use the TurboTax Credit Score website.

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