Credit Score Range
March 31st, 2008 Subscribe To Our Feed
The most common credit score range used by credit bureaus is between 300 and 850. This is also the same range used in the FICO (Fair Isaac Corp.) score, which is considered by most to be the premier credit scoring system.
Consider these numbers as two extremes. 850 means you might get a loan to buy an island and a luxury villa and a yacht. 300, on the other hand, means that your credit is so bad that you can’t get anything.
Actually, that’s quite an exaggeration. Even people with poor credit can get approved for a loan, just as people with nearly perfect scores can get denied. The credit score range reflects only the likelihood of whether you are going to be approved or not. It does not necessarily represent the final decision, because the truth is that there are many factors involved in approving you for a loan and your credit score is only one of them.
However, where you fall within the credit score range is a good indicator.
Good Credit Score
If you have a credit score of 700 or higher you have excellent or very good credit. This also means that lenders will probably offer you better rates and/or discounts.
For some lenders, the best credit score ranges are those numbering 720 and above. But if you score between 680 and 699, that still means good. It means you can get a normal loan with normal interest rates and normal loan rates.
A credit score range of 620 to 679 is average and majority of people in the United States have scores along that range. It means you won’t get denied but the terms are not going to be that generous either.
Low Credit Score
A credit score range of 580 to 619 is considered a low credit score. It does not necessarily mean, however, that you cannot get any credit. In fact, banks and brokers would be all too willing to lend you money but on their terms. This means that yes, you can get a loan but the interest rates are probably going to be very high. But the good news is that your score is not so low that it would be impossible to move it to "good" status. Through simple credit-fixing tips, you can change low credit to good credit.
Bad Credit Score
Below 580 and your credit is bad. You may still get a loan but the terms will be harsh. However, should you decide to take it and you manage your payments you will have a new start to building your credit and, next time around, the terms should be more favorable.
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How To Maintain Good Credit Scores
March 28th, 2008 Subscribe To Our Feed
Your credit score affects you in more ways than you may realize. You may think nothing of this 3 digit number but just ask any lender if they would give a favorable loan term to anyone who does not have a good credit score and you will see how important it is to maintain good credit scores.
Good credit scores are indicative of good financial health. It means that you pay all your bills on time, that you never miss out on your monthly credit card payments, that you have more credit available than you have debts. To a lender, this means you are low risk.
Maintaining a good credit score, however, takes some work. Just as it might take you years to build a positive reputation and only one second to destroy it, it can take a good amount of time before you are able to move past the average mark in credit scores and just one unpaid bill could bring it all crashing down.
The following steps should help you maintain a good credit score:
Pay Your Bills on Time
It doesn’t matter how you do it, whether by credit card, check, or bank draft, just so long as you do it on time. This is the first step in maintaining a good credit score. Punctuality in making your payments, after all, is a vital element of good financial management.
Keeping tabs of all your due dates may help. You can then create a budget plan where you list your household’s cashflow – in (income, salary, etc.) or out (expenses, repayments, etc.), including the dates when you are supposed to make your payments.
Maintain A Savings Account
Save for a rainy day. There is no better financial advice around than this and no better way to maintain good credit scores. Savings come in handy during emergencies or when there are contingencies that you suddenly need to pay for. This way, you won’t have to rely on outside financing whenever you run into trouble.
In addition, you could also add your savings to the money needed in order to purchase a home or other items you may need in the future.
Practice Self-Restraint
It will be hard maintaining good credit scores if every time you go to the mall, you buy whatever you feel like. Practice self-restraint if you want to keep your credit good. Just because you want something does not mean that you have to have it now. Buy only those things that are absolutely necessary and leave the rest for later when you have more money to spare.
These are just a few of the ways that will help you maintain good credit scores.
