What Is a Top Borrower?
A number one borrower is any individual who is considered a poor credit risk. This kind of borrower is considered much more likely to make loan expenses on time and much more likely to repay the loan in whole.
Figuring out Top Borrower
Top borrowers have credit score rating data that show a strong history of the usage of credit score rating appropriately and coping with loans responsibly. As a result, their credit score rating scores normally have a tendency to fall on the higher end of the spectrum, albeit no longer as most sensible as those of super-prime borrowers. While top borrowers pose a low risk to lenders and creditors, super-prime borrowers pose the least risk. A number one credit score rating rating normally falls somewhere throughout the 640 to 740 range, even supposing the right rating that is considered top is dependent upon the scoring kind used.
Top borrowers normally don’t have any bother getting approved for new credit cards with favorable words and conditions or getting approved for mortgages or other loans. Regardless of this, top borrowers however is probably not eligible for lenders’ advertised fees, which can also be occasionally intended only for super-prime borrowers.
If a main borrower’s credit score rating rating slips underneath the variability classified as top, the borrower is not going to be able to merely obtain new loans and credit cards or get the best words. Borrowers with credit score rating problems, who are classified as subprime or near-prime, nearly always wish to pay higher fees.
Different Rankings for Different Credit score rating Bureaus
Equifax, Experian, and TransUnion, which can also be the three number one credit score rating bureaus, each has their credit score rating scoring range and methods for classifying borrowers. In some instances, all 3 credit score rating bureaus will deem a borrower a main borrower. In several instances, alternatively, one credit score rating bureau will deem a borrower a main borrower, and a few different will put the equivalent borrower in a definite elegance. Except for the quite a lot of scoring methods, occasionally each of the three bureaus has somewhat different information about a borrower’s credit score rating history because of no longer all creditors report to each and every bureau.
For example, if a borrower has a delinquent auto loan that was once as soon as best reported to TransUnion, the borrower’s TransUnion rating would possibly make the borrower a near-prime borrower. The equivalent particular person’s Equifax rating, which doesn’t factor that delinquent loan into the credit score rating rating, would possibly result in a main borrower classification. On account of this, borrowers would possibly have the advantage of contacting a variety of different lenders when looking for a loan. Different lenders would possibly pull a borrower’s credit score rating rating from different credit score rating bureaus, which means the borrower would possibly qualify for a better fee with one lender over another.
