As a general rule, here’s how scores are viewed
Below 580: Very High Risk
Anyone with a score below 580 will be viewed as a very high risk with a high likelihood of not honouring the debt. As such, many companies will not consider them at all. Those that do will probably require a substantial deposit and/or collateral. They will also charge you more in terms of interest as a result of the increased risk they are accepting.
581 – 599: High Risk
This is a borderline area where lenders will tread very carefully as you will be seen as a high-risk client. Finance and credit will be extremely difficult, but not impossible, and when granted, will likely come with conditions and high interest rates.
600 – 619: Average Risk
A score in this range is considered to be an average credit risk and you should not have much difficulty getting reasonable credit with fair interest rates if you do not have any judgements or listings behind your name.
620 – 649: Low Risk
At this level, things are looking up and the institution will look very favourably at your application. They will want to do business with you as you have proved you are a responsible user of credit and therefore pose a low risk to them. They are likely to offer you an attractive deal and you will have a strong negotiating position. Use it.
650+: Minimum Risk
With scores this high you are in a great position to negotiate finance and you should qualify for preferential terms and interest rates. Companies want to lend money to people with a score over 750 and will go out of their way to get your business.
As you can see, often just a few points can make a significant difference. Moving up a score bracket will be beneficial so do everything in your power to improve your score. An improvement of 10 or 20 points is not a major challenge with a bit of insight and effort.
There are obviously other factors that are taken into consideration but your credit score is one of the most important. Do everything in your power to maintain a good score or work hard to improve a poor score. With a low score, you will be going cap in hand to the lender whereas a higher score will put you in a position of strength and give you much greater power when negotiating the terms of the loan.
You can view your credit record for free credit score and DirectAxis Pluse websites in order to know your credit standing.