A good credit score is important for many reasons; it determines how much you will pay in interest on loans and whether you will be able to get a loan or not. If you have a poor credit score you will pay more on loans than someone with a good credit score. Many people wonder, what is a good credit score range?
There are many factor that go into calculating your credit score, like number of late payments, length accounts have been open, bankruptcies, inquiries, and several other factors. This credit score is called a FICO score and it is compiled by Fair Isaac and Company.
There are three major agencies that monitor your debts and payments; they organize the facts about your history in this department and tally a score. These companies are independent from each other, so the information that each one has can be different.
For the same reason, you may have different credit scores issued by each company. Different lenders choose to work with different credit reporting companies. Some lenders work with only one, while others work with all three and consider all three reports and scores in the loan decision.
FICO scores run between 300 and 850 points. Because there is only 550 points between the lowest score and the highest score, small changes can have a big impact on your loan options and other aspects of your life.
A good credit score range is typically between 760 and 850. A credit score in this range will allow you to get the lowest interest rates and qualify for the best loan programs available. A score range between 720 to 759 will still normally qualify you for good interest rates and you will be able to qualify for most loan programs. If your credit score is between 680 and 719 you may start to have more complications when applying for credit, but you should still be able to qualify for loans.
A credit score range of 600 to 639 will present you with a lot of complications. This score range will lead to paying higher interest rates or not being able to secure a loan at all. A score in this range needs some help and should be given attention.
A score below 600 is considered poor and must be worked on and improved upon. A score this low will often prevent you from getting a job because employers believe that if you are that bad with your finances you must be an irresponsible person.This may or may not be true, but a bad credit score can really make things difficult outside of just qualifying for credit. It’s also common for your auto insurers to consider credit ratings when underwriting insurance.
It is incredibly important that you check your credit report and score frequently. Keep up on any changes and have mistakes corrected as soon as you find them. Credit history has a significant impact on your life and you must be vigilant about your own reports. Your credit score is quite important and it is very necessary to keep it in a good credit score range. You can keep your score up or improve a bad score by paying bills on time, avoiding bankruptcy, and keeping credit card balances under 49% of the limit. There are many ways to improve your credit.