Understanding Your Credit Score Range
What Credit Score Range is Excellent?
To fully understand the meaning of your credit score it is essential that you are familiar with the meanings of each of the credit score ranges.
Most people are aware that the credit score ranges from 300 to 850 for FICO and up to 900 for other scoring models but not all understand what each credit score range represents.
800-850+ Credit Score Range
If your credit score is 800 or higher you basically have flawless credit. If your credit profile has just been established and you have no credit history this high credit score will be meaning less to potential lenders.
If your credit score is 800 or higher and this is accompanied with years of solid credit history you will be in the enviable position of being able to negotiate for lowest interest rates. You will no doubt have no problem in obtaining best rates for mortgage loans and insurance policies. Only 13% of the population fall within this credit score range.
720-799 Credit Score Range
If your credit score falls within this credit score range you will still qualify for the same low interest rates as those falling in the highest credit score range. This is still considered an excellent credit score but potential lenders may perform a more thorough check on your credit before approving the same low rates.
Approximately 27% of the population have a credit score that falls within this credit score range.
680-719 Credit Score Range
This credit score range represents a good credit score – not excellent but still good. If you fall within this range you should still qualify for most loans but will probably be required to pay slightly higher rates than you would have had your credit score fallen in a higher credit score range.
You may however experience difficulty in obtaining A-paper mortgage loans or the best insurance premium. This credit score does not however represent bad credit.
620 - 679 Credit Score Range
If your credit score falls in the credit score range of 620 – 679 it is a sign that there is room for improvement but you should still be able to get approved for a loan but less lenders may be willing to assist you. Those that are willing to supply you with credit may pose more restrictions.
It is advisable that you start to work on improving your credit score as this will mean a savings in interest, less restrictions and a wider market to chose from when securing a loan.
Credit Score Range
580-619 Credit Score Range
When your credit score falls in the range between 580 – 619 your credit score has fallen below average and lenders will not be so willing to risk giving you further credit. Should you be able to secure any form of financing it will be at higher interest rates. You may find that the only credit that you can get is from bad lenders and credit banks.
If your credit score has dropped into this credit score range you will most certainly need to evaluate your credit report and take steps to raise your credit score out of this range.
500-579 Credit Score Range
For a credit score to drop into this credit score range you most probably have a bad credit report and a history of either a collection , late mortgage payment, foreclosure, charge-off or bankruptcy. You are in the unenviable position where you are in dire need of credit repair.
You should evaluate your credit and immediately take action to change your credit score. You have obviously made credit mistakes that are not only impacting you now but could impact you for years to come.
Below 500 Credit Score Range
If your credit score falls within this range the chances are that there is very little or no positive remarks on your credit report.
You should seriously consider professional help as you more than likely have serious financial problems.
Composition of FICO Credit Score
You are probably wondering just what
criteria are used to determine your credit score and place you in any
particular credit score range. After all one can only improve your credit score if you know what you are being judged on. Here is the split for the FICO credit score:
Paying your bills on time : 35%
Debt-to-credit ratio : 30%
Length of Credit History : 15%
New Accounts, Applications, Diversity of Credit Types : 20%
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