Posts Tagged ‘creditor’
Basic Information on Debts
Here is basic information you should consider when you have a credit obligation or debt to another person / company. This information generally refers to the United States in the legal term, but I imagine it would be something similar in our countries.
What is a creditor?
A creditor is the person or company you have borrowed money or sold a product or service with which you make into an agreement to pay in the future. Usually this obligation includes the principal value and interest you will pay to the person or company for them to be part of that obligation.
What types of debts are there?
There are two types of debts that you can be: The insured and uninsured. The secured debts are those which offer no guarantee for any reason you do not pay the debt. A prime example of a secured debt is the mortgage, if for any reason you do not pay the monthly fee to the bank they could take home and sell it to recover their money. An unsecured debt is that you offer only your word and they’ll give the duty, an example would be a credit card.
That means good credit?
When you want a loan from your bank, buy a house or getting hooked on a mortgage always in your head that you have to have good credit. Previously we talked about how your FICO score is made on what model that most lenders use, these are the scores you might have in detail. This score can vary from creditor to creditor, but will give you a good idea where you want your score when you go to apply for credit.
Your FICO score can range from 300 to 850, the higher the better:
720 or more
This score is considered to be excellent. This score will open the door to interest rates the lowest in the market.
Between 680 to 719
Most people have this score. This item is considered very good. If you have this score usually give you a competitive interest rates.
Between 620 to 679
If you are in this category most likely to get approved for the loan, but the terms and rates could be a little high.
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