loans

Understanding Credit Scores Range

Loans are common financial strategies for many people but before you can get a loan, you need to qualify. A qualifying factor on getting a loan is your credit score, which leads us to understanding the credit scores range. Any professional or individual who earns money or would like to ask for a loan should be well informed about their own scores and how the credit scores works. Understanding what the scores mean can help you assess a stronger strategy to keep your financial history strong in front of creditors. Remember, where you fall on the credit scores will determine your likelihood to get a loan and the amount of interest that you get.

The most commonly used credit scores range is the FICO system created by Fair Isaac Company. Nowadays, this is the most widely used credit scores in the US. Other major credit reporting agencies set up their own credit scores derived from the FICO. If you want to make a loan, you need to know your score and the range. The three major credit bureaus offer similar services but different score ranges so this affects the interpretation of their scores. It is ideal to be well informed about the variations and variables that could affect each of the score ranges.

In calculating the scores, financial activities, delinquencies and past history are used. For example, late or missed payments, new lines of credit, convictions, liens, bankruptcies, and other factors are included. Positive and negative factors are considered since the idea of the credit scores range is to draw a picture and position you on the right range that reflects your credit condition. It is a plus and minus system where pluses are added on good events while minuses are made on bad events. Most of the time, deductions carry a bigger impact than pluses. It seems unfair but that is how the credit scores range is designed. You work hard to keep your score good but a slip on your record can be devastating.

Based on the FICO, the credit scores begins with 350, the lowest possible range. Other ranges start from 330 and can drop down to 300. The highest possible credit scores is consistent among the Big Three bureaus: 850. Now let us take a glimpse on what the credit scores range says. If you fall between 700 to 850, you have excellent score. If you fall on 680 to 699, you are good. If you wall between 62o to 679, it is OK, an average score to have. As you progress lower, from 619 down to 350 or 300, then you find yourself in the low to bad credit score. If you have an extreme situation that really caused you to go down your range, you might fall in this credit score range.

You wish you know how you fare on the various credit scores? Simple. Sign up now and receive your scores from the top 3 credit bureaus and find out the variations of your scores.