Who is more trustworthy in the eyes of banks and online lenders between those who have never borrowed and those who have borrowed many times? The answer depends on their credit scores. So what is a credit score? How do online lenders assess credit scores? Let’s find out the answers in the article below.
A credit score (FICO) is a score that financial institutions use to assess the credibility of an individual or enterprise when using forms of lending, based on an analysis of their credit history. A high credit score will make the loan application process easier and faster, on the contrary, a low credit score will make lenders less likely to accept your application.
What is a credit score?
Credit scores in the Philippines range from 300 to 850, and 850 is the highest score. Typically, the scores higher than 650 are considered “good”, more than 700 are considered “very good”, and scores higher than 750 are considered “excellent”. The higher your credit score is, the higher your credibility is. Banks, insurers, and other financial institutions assess a borrower’s credit risk based on credit scores.
Credit scores are generated based on Fair Issac’s very strict standards with the following basic weights: 35% for payment history, 30% for debt, 15% for credit history, 10% for new credit, 10% for type of credit used.
Payment history (35%): This is a factor determining your stability of timely making payment, which is the most important contribution to your credit score.
Amount of debt (30%): Your outstanding debt. The lower your outstanding debt balance is, the higher your credit score is.
The length of your credit history (15%): Credit history is calculated from the time you started opening a credit account in your name. A longer credit history may result in a higher credit score.
Newly registered credit (10%): Pursuing new credit negatively affects your score. Every time you apply for credit, your score goes down.
The types of credit you use (10%): Combining different credit accounts wisely also improves your credit score. However, it is not necessary to have many different types of credit to get a good score.
Factors affecting your credit score
In fact, banks and lending institutions all rely on credit scores to assess the creditworthiness of a customer and decide whether to lend or not. Therefore, when you have a good credit score, you can get faster application approval, higher loan limit at a lower interest rate.
Therefore, you should proactively check your credit score regularly, while seeking ways to improve your credit score. Here are some tips for you to increase your credit score:
Actively pay your debt in full and on time
Do not get more loans when existing one has not been paid
Limit the use of collateral to guarantee other’s loans
Limit excessive use of multiple credit cards from many banks
Do not exceed your credit card limit
Avoid changing jobs too often
Regularly check your credit score
MoneyCat is a 24/7 online financial solution providing and consulting platform, which is a part of a large financial structure operating in Vietnam, the Philippines and Russia. To get online loans through the MoneyCat app, you just need to follow 4 simple below:
Step 1: The MoneyCat online loans application is available on GooglePlay store, you can download directly on it or visit link https://moneycat.ph/
Step 2: On the platform, client need to fill out registration form including full name, age , contact number, ID card, email, bank account number, bank name, etc.
Step 3: Get authorized by uploading your photo holding ID card and ID card by itself.
Step 4: After reviewing, Moneycat’s system will send you confirmation code via your mobile, you will need to fill out this code onto the platform to finish the registration.
MoneyCat is a trusted personal loan platform in the Philippines
At MoneyCat, you don’t need a great credit score to get fast approval online loan. We review your application within 5 minutes and disburse it on the same day. With the advantages of simple, fast, and reputable lending procedure, MoneyCat is a safe and reliable financial solution for getting online loans in the Philippines.
Above is information on credit score and related factors. In order for your online loan applications to be approved quickly, you should make sure that your credit score is always at a good level. If you are in urgent need of a loan but are still concerned about your credit score, consult MoneyCat to find the best financial solution.
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