You can get new furniture for your home through loan or credit payments, just like any other facility that is available through credit financing. There are a number of different furniture manufacturers, dealers, stores and retailers in the market and all of them might be requiring different minimum credit scores to allow you for the furniture financing.
The bank or lending institution, in this matter, plays a significant role in getting your loan approval for the furniture. Your credit score is calculated by taking into consideration your payment history, total debt, and other components. It gives your lending institution an idea of whether you will be able to pay back your loan or credit in the future or not.
The minimum credit score requirements will differ as you move from one financing option for furniture to another. However, you should keep in mind an idea of the credit score that you need to have before you apply for furniture financing. You should have a credit score above 600 to be comfortably able to get your loan request for the furniture approved by the lending institution. Credit scores below 600 would need some luck to go through with high price furniture.
Explanation of credit score ranges
It is important to know the category that you fall into when it comes to credit score for you to be aware. The range of a credit score can go from 300 to 850. Always remember that the higher your score, the higher the chances of you to qualify for a loan. There will also be instances where a financing company is okay with 650 scores, while the other is fine with a 750 score. It will all depend on the lender itself.
A lender or a bank will check your credit score if you qualify for the application that you are requesting. Here are some of the credit score ranges that you should know.
Bad credit score
People with a credit score below 579 is known as high risks. Foreclosures, poor payment history, and bankruptcies are the reasons why people fall into this category.
Good credit score
A good credit score ranges from 680 to 719. People with this credit score can expect approvals and interest rates that are better.
Very Good
A very good credit score ranges from 720 to 799. People with this credit score is known to be small risks, and they often get loan amounts that are higher than usual.
Excellent
An excellent score ranges from 800 and above. Financial freedom is expected to people with this score.
How are credit scores calculated?
The weight of each of the five categories are; 30% of amount owned, 10% is for the new credit, 15% accounts for the length of credit history, 10% is the credit mix and the last 35% accounts for the person's payment history.
The FICO score takes into consideration positive as well as negative aspects of the credit report. The percentage or the weight of any of the categories mentioned above may differ from a person to another depending upon the information available in the credit report.
The FICO score takes all of the information from your credit report. However, the banks or any other lending institution might look at your income, type of credit and employment history when you apply for a loan or mortgage.
Once a certain lender asks for a client's credit report, they can also ask for the Fico score. Other sources say that your Fico score will include 35% of your payment history, 30% of your credit utilization, and 15% as to how long have you been borrowing.
Furniture financing options based on credit score
Get to know more about the Furniture financing options based on credit score with the information provided below.
Most retail stores are offering store credit for furniture financing. In fact, they are offering these credit to people who have a fair score to excellent ones. But individuals who have a poor score can still apply for one for as long they provide the requirements needed for the store. Get to know more about it by reading the information below.
Your Credit Score
Since this is a credit store, they are not that strict when it comes to credit score. But you should know that they can sometimes damage your credit score since this is called a "hard inquiry."
Credit Limits
Typically the credit limit is lower than expected, which is a good thing because you won't get tempted in purchasing things that you can't afford comfortably.