It is important to know your credit score range; your credit rating determines whether you will qualify for a loan as well as what interest rate you will pay. A bad credit score can lead to paying thousands more in interest on loans. For this reason, and others, it is important to know what a good credit score range is.
Several factors go into making up your credit score, some of these factors are length of time accounts have been open, number of times you have made late payments, and bankruptcies. Your credit score is often referred to as your FICO score. When you apply for a loan you may be asked if you know what your FICO score is.
Experian, Transunion, and Equifax are the three major credit reporting agencies that most lenders use. These companies compile your credit history and determine a score. Each of these companies is separate from the others and for that reason your credit history compiled by each company may have differences.
Each of these credit reporting companies may also have a different credit score for you. Normally, your scores with all three companies will be similar, but rarely the same. Some lenders prefer one of these three major credit reporting companies over the others. There are lenders who work with only one of these companies and there are lenders who work with all three.
A FICO score can be anywhere in the range of 300 points to 850 points. With such a small number of points between the highest score and the lowest score, just a small change can have a big impact. A difference of only 50 points can have an impact upon the interest rate you can qualify for on your loan.
Between 760 and 800 points is generally considered to be a very good score; most lenders consider that score range to be very low risk. The best interest rates and loan options are available to those in this score range. Between 720 and 759 is still considered to be good and will still get good interest rates and qualify for most loan options. A score between 680 and 719 may start to present some problems because it is getting into a higher risk category for lenders.
A scored between 600 and 659 will present real problems when you look into getting a loan. This credit score range will not qualify for many loan options and will certainly lead to higher interest rates. It is a good idea to try to bring a score in this range up before applying for loans.
If you have a credit rating that is below 600, you will have serious problems with being approved for loans. If you do manage to get a loan with a score this low you will pay the highest possible interest rates and waste thousands of dollars on interest. A score in this range needs serious and immediate attention.
Credit scores and reports can have a serious impact upon your life. It is important to always keep up with your credit reports and scores. Take time to review them at least a few times a year. Be sure to report inaccuracies to the credit reporting company immediately. Fixing errors can be a good way to improve your score quickly. Do not allow your credit score to go unchecked because a bad score takes years to repair.
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