Credit Score Range
Lending institutions use many different categories for a credit scoring. This scoring method determines the creditworthiness of a borrower based on the credit report. The most popular scoring method is from the Fair Isaac Corporation, known as FICO, a California-based company that developed the first credit score.
Credit Score Range
Excellent – 720+
A FICO Score of 800 means an Excellent score with a Very Good Credit for a privilege to have a better rates and a discount. With a solid credit history, the lowest rate will be granted for 800-850 credit score. A 720-799 score has the same approval rates as the excellent score but has a few pricing incentives.
Good – 680-720
For 680-699 score means a Good score to have a normal loan rate. A 620-679 score is still okay but the terms are not going to be so generous.
Below Average – 580-619
A FICO Score of 580-619 is a Below Average credit score. This marks the start of a bad credit, so brokers come in to help with more commissions on their part. This tends to have a higher interest rate. Credit score in this range needs to be evaluated to employ measures so as to increase the credit rating to save credit reputation.
Bad – Below 580
A Bad FICO Score is from 500-580 wherein there is a need for a serious credit repair. Credit score in this range needs to evaluate the credit and an action needs to be done immediately. The 499 score is the worst and a bad range where a major repair is needed with a probable professional help.
There are several factors that affect good reputation on credit score. The payment history is more likely the most important factor. The more payments you make on time, the higher your score will likely be. Another factor is to maintain the credit limit under 35%. A higher one will affect the score. The length of credit history is taken into consideration—that should not be less than 6 months. Applying for many new credit lines will absolutely affect the score. There should be maintenance of 5 types of credit without any finance companies. Lastly, the length of employment from a good occupation also counts for a good standing on credit score.
To repair credit rating is harder than maintaining a good status in credit score. Credit rating is a lender’s probability to grant a loan. The best way to repair a credit rating is to sustain 2 credit lines for 2 years with $2,500 credit limit. Another approach to raise the rating is to cut balances to 35% of credit limit. A store credit card is not advisable to acquire since these offers a low credit limit.
