From super-prime to deep subprime, here are the 5 credit score categories you need to know.
Lenders who extend you credit — whether it be in the form of a car loan or a new credit card — look at yourto decide how likely you are to pay back what you borrow. Your credit score falls between 300 and 850 .
But to make lending decisions easier, financial institutions categorize what kind of borrower you are by dividing consumers into five categories based on credit score. If you have a credit score, your profile falls into one of the following categories: super-prime, prime, near-prime, subprime and deep subprime.
These names describe where you stand in comparison to the types of borrowers who qualify for the best or "prime" interest rates and financial products.discriminatory mortgage lendingHowever, the categorizations are meant to help both lenders and borrowers understand what kinds of credit products you qualify for, what kind of risk both parties take on and how terms like APR and the size of your loan are determined.
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