Credit Score Range – Where Do You Fit In?
Before you pull out a loan from an institution, you have probably heard that the creditor will examine your credit score range. The reason they do this is to check your past credit history.
By past credit history, I mean to verify you pay your bills on time, how much income you make, if you own a home, and how long you have worked at your current job.
A lot these factors are taken into consideration because a creditor wants to protect themselves from you defaulting on your loan.
Most credit rating systems depend on the creditor and their experiences with customer. To produce the system that is right for their organization, a creditor will judge your eligibility by the factors listed above.
If a credit score range is used, however, you can expect the follow definitions for the following scores 300-850.
* 700-850: Excellent or very good credit
* 680-699: Good credit
* 620-679: Average credit
* 580-619: Low credit
* 500-580: Poor credit
* 300-499: Bad credit
Good credit score ranges are used as a determining factor for being able to qualify for services from creditors. If you are in the good or excellent categories, you can also expect to get a lower interest rate.
When trying to buy a house, it is essential to have good credit so that you can get the best rate possible.
On the other hand, if your credit score range is lower than the excellent or good categories, you can expect to pay an interest rate a few points higher than the prime.
If you take out a 30-year loan, that will be a lot of money in the long run just because you have poorer credit score.
It is a good idea to be aware of you current, standing credit score. It should be part of your annual routine to check your FICO credit score and credit report.
If you are aware where you are situated in the credit score range, you will have a better handle on your credit and find ways to build your score if needed.
Checking your credit score and report is also a good idea so you can check for any discrepancies that may be pulling your score down.
