Understanding Your Credit Score Rating Scale Range

Evaluating your credit requires some basic knowledge of how credit score ranges and the rating scale is measured. Here is what you need to know.

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Credit Score Rating Scale Range

Checking your credit score regularly is an important part of your financial health. Your credit score helps you gauge how creditors will view your credit if you decided to apply for a credit card or loan in the near future.

What is a Credit Score?

Credit scores are a three-digit number calculated based on the information in your credit report. You probably know that having a higher credit score is better, but it’s hard to know exactly what your credit score means if you don’t have something to put it into perspective. Knowing the credit score rating scale range helps you figure out whether your specific credit score is good or bad.

There are many different credit scoring models, FICO Score and the Vantage Score are the two most commonly used and well-known credit scores. When you apply for credit, the lender is most likely to use one of those two credit scores. The latest versions of the FICO and VantageScore fall on a range of 300 to 850. Credit scores on the higher end of the range are considered good and those on the lower and of the range are bad.

● 300 to 629: Bad credit
● 630 to 689: Fair or average credit
● 690 to 719: Good credit
● 720 and higher: Excellent credit

Credit Score Rating Scale

Keep in mind that what counts as a excellent, good, fair, or bad credit can differ between lenders as each has their own credit score cutoffs.

How Credit Scores Are Calculated

Credit scores are calculated using the information in your credit report. That information is supplied by the businesses you have a credit relationship with. Each month, your account details, including your current balance and payment status, are updated on your credit report. As your credit information changes, so does your credit score.

How you manage your credit accounts directly influences where your credit score falls on the credit score range. If you manage your accounts well – meaning you pay your bills on time and you don’t borrow more than you can afford to pay back – your credit score will fall on the higher end of the credit scoring range. On the other hand, mishandling your credit accounts will cause you to have a lower credit score on the lower end of the range.

In the United States, there are three major credit bureaus that collect credit information from your creditors and lenders. These bureaus are Equifax, Experian, and TransUnion. Each of these companies has their own separate database of information collected from various businesses and courts. These bureaus don’t share information with each other and some businesses may only report to one of the credit bureaus. Because of this, it’s possible for you to have different credit scores – all three of your credit reports won’t look the exact same. Each of your credit scores may fall in a different place on the credit score range.

You can check the information that the credit bureaus have on file for you for free once each year by going to AnnualCreditReport.com. You’ll be able to download a free version of your credit report from each of the major credit bureaus without having to enter your credit card information or subscribing to a credit report service.

Do You Have a Credit Score?

Not everyone has a credit score. The credit scoring calculation needs credit report information to generate a credit score for you. You need to have at least one account that’s been open and active for six months or more, you won’t have a credit score. If you’ve never had credit, recently opened your first credit account, or you’ve haven’t used your credit at all within the past six months, your credit report may not have enough recent information to calculate your credit score. Once your credit report has the right amount of information, a credit score can be generated for you.

Age and Average Credit Scores

Knowing the average credit score can help you gauge how you stack up against other consumers. In 2017, the average credit score was 700, which indicates the average consumer had good credit. Average credit scores were also different among various age groups according to Time Inc:

18-29: 652
30-39: 671
40-49: 685
50-59: 709
60+: 743

Age and Average Credit Scores
Based on these average credit scores, it apppears that your credit score improves as you age. It’s not directly because of age since age itself it not a factor in your credit score.

Age could be indirectly related to your credit score. The average age of your credit accounts considers both the age of your oldest credit account and the average age of al your accounts. This factor is 15% of your credit score. Having your accounts open for longer and minimizing newly opened accounts can help boost your credit score demonstrating that you have more experience with credit.

It can also be reasoned that as you get older, you become more responsible and have enough income to pay your bills and manage your debt amounts. Debt and payment history together make up 65% of your credit score. Managing these two areas can help you achieve a better credit rating.

Other Credit Score Ranges

While FICO is the most widely used credit scoring model, there are a few others created by the credit bureaus and the VantageScore. When lenders check your credit score, they may use one of these credit scores or another industry specific credit score.

● TransRisk New Account Credit Score: 300 to 850
● Experian National Equivalency Score: 360 to 840
● VantageScore 3: 300 to 850
● VantageScore 2.0: 501 to 990
● FICO 9 Credit Score: 300 to 850
● Equifax Credit Score: 250 to 925
● FICO NextGen Credit Score: 150 to 950

What is a Good Credit Score?

Having a good credit score is the goal of almost every consumer. That’s because there are a number of benefits of having a good credit score. Not only is it easier to have your applications approved, you can also qualify for lower interest rates, which means lower monthly payments and less money spent on interest costs. A good credit score helps you reach your goals of owning a home or buying a car by allowing you to get approved for the mortgage or auto loan. Your credit score comes into play whenever you apply for a credit card, an apartment, even when you get cell phone and internet service.

A good credit score comes from being responsible with your credit and other financial obligations. It means paying your bills on time each month, keeping your debt levels low, avoiding debt collections, and minimizing credit applications. On a credit score range of 300 to 850, a good credit score is generally above 690. An excellent credit score is above 720.

What is a Bad Credit Score?

It’s difficult to live with a bad credit score. Since many businesses use your credit score to decide whether to approve your application and to set the terms, a bad credit score makes it hard to accomplish even things as simple as having ulitilies turned on at a new apartment.

On a credit score range of 300 to 850, a bad credit score is below 629. If your credit score falls on the lower end of the credit score range, you may have many of your credit applications denied. When you are approved, you may have higher interest rates or even security deposits.

A bad credit score is the result of missing credit card and loan payments, defaulting on accounts, having one or more collections, or even having serious negative items like a foreclosure or repossession. You can recover from a bad credit score and by clearing up negative items, even if it means making a payment to bring the account back into good standing. When you review your credit report, look for negative items that are affecting your credit score. Working on these items and establishing a positive credit history will raise your credit score.

There are no guarantees when it comes to your credit score and applying for new credit accounts. Having a good credit score doesn’t automatically mean you’re approved and having a bad credit score doesn’t automatically mean you’re denied. The final decision is based on what you’re applying for and your other financial details like your income and debt. If you have an application denied because of your credit score, the lender is required to send you a copy of your credit score and the major factors affecting your credit score.

Checking Your Own Credit Score

Checking Your Own Credit Score

Keeping tabs on your credit score can help you stay aware of where you are on the credit score range. You can use a free service like Credit Karma or Credit Sesame to check your credit score without having to enter your credit card number or subscribe. These free credit scores are for educational purposes and may not match what the lender sees when they check your credit. It will, however, give you an idea of whether you have good or bad credit and whether you need to work on your credit score.

Regardless of where you get your credit score, make sure you pay attention to the credit score range in addition to your three-digit credit score. Knowing the credit score range can give you perspective on your credit score, indicating whether your credit score is good or bad when it comes to credit scoring range.

32 COMMENTS

  1. This is really helpful for me since I just started working. I want to maintain a good credit score throughout my life, so thanks for this informative read.

  2. I see now that credit score is an important indicator of financial stability. I’m turning 20 next month, and I want to be as responsible as possible when it comes to money. Thanks for this helpful article

  3. This made a very good read, it will educate everyone about how to have good if not an excellent credit rating. Everyone should try to achieve good credit, as it will help in almost all future credit inquiries.

  4. Well detailed post on Credit score rating. I always have known why people have bad credit is their irresponsibly, some people try to cheat the system by not picking up bills and not paying their loans. All problems associated with bad credit score can be avoided if people live up to their own responsibility.

  5. Very detailed article. Some people have trouble with managing money, and spend more than what they can actually afford. It makes things easier to understand about credit score rating and why we should all be mindful about it. Thanks!

  6. Very nice info, yes some people only learn about credit scoring when they approach a bank for credit, so the small checks which they could have done earlier could have made a difference. Some sort of awareness should be created among common folks about this credit scoring system so that they don’t face difficulty in getting the credit established.

  7. Indeed understanding the Credit Score Range will help you know how a financial institution reaches its decision to give or not give you a loan. Additionally, I understand what I need to do to make improvements.

  8. Thank you for this information about credit score ranges. We all need to understand credit to avoid negative credit scores in the future.

  9. Well detailed post that will help any one gain knowledge on how credit scales works and how to calculate credit scores too. Having a good credit score is definitely the way to go.

  10. This is very informative and educative, this will helps me know how financial houses make use of ones data to ascertain one’s credit score range. This is a very valuable post for just about everyone.

  11. I do not know much about this because as much as possible I stay away from debt or credit cards for that matter. However, I think debt or in anything really what is important is TRUST. Scores or not we must respect the system. Otherwise we find ourselves with debt or the one giving people loans.

  12. I do not use credit cards by my dad does. He always make sure to pay the loans that he has because he says a good credit reputation will go a long way and he is right. In fact that mentality saves the finances during emergency because having a new loan is easier.

  13. We all got to be careful with how we use of credit cards. Nowadays, there are lots of amazing yet expensive things that we don’t really need in our daily lives. We gotta live smart and this is one step.

  14. Before reading this article, I didn’t have any idea about credit score ratings and ranges. This article explained complex subjects in a simple and understandable manner, especially the credit score calculation and age and average credit scores, which are presented very clearly.

  15. Credit scores will differ from one country to another. Credit scoring entails various criteria and information about the person and the financial institution.

  16. Statistics show that the youth have bad scores which they build slowly as they grow older. I think you have to make financial blunders before you are wise enough to stabilize which happens at a later stage in life.

  17. The best time to learn and be wary about one’s credit score rating is now. Yes, no matter how young you are, your credit rating should already be impeccable as you dont know when you might need to get a bigger loan/mortgage later on. Best to have a clean record maintained.

  18. Credit score ratings are really important to monitor. No matter how young or old you are, you must always have a good to outstanding credit ratings. This article tells you exactly how to maintain such rating, thanks for this!

  19. Does this apply for all credit cards? Even International ones such as ones in the Philippines? I live there and was wondering what it is like when you apply for one.

  20. I’m beginning to see the value of knowing your credit score. It’s important to understand good credit rankings to see how you can improve each year. It’s especially crucial if you have long withstanding debts that you were completely unaware of. In addition, if you ever want to invest in a small business venture, you’ll need good credit to receive a loan.

  21. Thanks for explaining this so clearly. I never bothered with checking my credit score until I bought a car a couple of years back. I’ve only ever heard of Experian, good to know there are a couple of others where I can check.

  22. Thanks for the information, I have never paid too much attention to this before. So far, only thinking that transactions must be active and paying bills on time, that’s all.

  23. It’s good to be in the know of the safe range your credit score should be at. I like organizations like Credit Karma that make the process fast and simple for you. Thanks for sharing.

  24. It’s good to be in the know of the safe range your credit score should be at. I like organizations like Credit Karma that make the process fast and simple for you. Thanks for sharing.

  25. It is nice to be aware of the range of your credit score. I like companies such as Credit Karma which makes the process instant for you.

  26. I have worked for a credit company before so I know how important it is. In order to maintain a good score, ensure that it’s not left to rot but always used, and paid on time every single month.

  27. I don’t own a car nor a mansion, but my credit rating is something that I can be proud of. I’m only 22 yet my credit rating is above average.

  28. My credit score dropped before and it took me and my mom 4 years to raise it up again. Credit rating is very important. I learned my lesson after that.

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