What Does Your Credit Score Range Say About You?
The credit score range your FICO score falls into tells lenders a lot about your personal and financial life. If your score is high, it tells them that you are dependable and tend to use your credit wisely. Lenders are apt to coming looking for you to give you a loan as opposed to you having to look for a lender.
On the other hand, if your score is very low or has dropped quickly recently, it shows lenders that you have delinquent accounts and struggling to make ends meet. You are likely to be turned down for loans as lenders will see you as too much of a risk.
If you have no score at all, you’re probably either too young, or you have a troubled past, but have become wealthy enough to pay cash for everything, including mortgages.
Your personal FICO score will reflect a low, medium or high within the credit score range:
Low is 560 or less. If you are wealthy, don’t worry about it. If you’re not, then you need to work on getting that score up by cleaning up your financial picture.
Medium is between 560 and 720. The higher your score is in this range, the lower your interest rate will be in a loan.
High is 720 and above. You are considered a low risk and will qualify for the best loans and interest rates.
FICO scores are determined by a checklist of categories that include:
- payment history
- balances versus credit amount
- types of credit accounts
- length of credit history
- number of new accounts
Other factors are the number of inquiries into your credit report in a time period and any legal action taken. If you are currently in a financial bind and you suspect your FICO score is low, the good news is that it can be repaired over time.
It is important to know where your position is in the credit score range and know what is on your credit report. Check the report carefully for mistakes and notify the credit agency in writing of any discrepancies.