When you want to secure financing for a purchase you are making, you will likely need to apply for a credit review. Many lenders out there will want to extend a credit offer to people who have high credit scores, but you might be wondering, what is the credit score range? The answer actually varies depending on the credit report that you and your lender decide to use. Understanding how these credit scores are tabulated can help you gain a significant amount of understanding about how this process works. You might be surprised by what score you may have, but you can take steps to raise it toward the maximum.
Understanding the Range of Credit Scores
First, you should simply learn a little about the different credit rating agencies that are out there. When you go with FICO, this will be the traditional rating scale used by many lenders. It typically rates individual lenders on a scale of 300 to 850. This means that you could score as low as 300 or as high as 850. Obviously, you will want to get as close to that 850 mark as you possibly can. There is another credit rating agency out there, known as VantageScore. This is an agency that uses a credit score range between 501 and 990. This is slightly different than the FICO score, but they both tend to use similar factors as one another.
Check out your credit score through:
Why You Have a Certain Score
When you get your credit report score from a provider, you may be wondering why you have been rated at a certain level. They will typically take a look at your credit history to determine whether or not you will be a risk to lend money to. This review will loosely be based on how you have managed your finances and credit awards in the past. If you have missed payments routinely, this may actually have a negative effect on your credit score. You may be surprised to find that an old, unpaid credit card can produce a damaging effect that will hurt your overall credit rating. This is why many financial advisers will tell you not to let these kinds of issues go unsolved for a long amount of time.
Common Pitfalls for Credit Scores
There are a few other issues that can also produce a dramatic impact on your overall credit rating. When you default on a loan, you are essentially saying that you are completely unable to pay a lender for the money they have given you. This typically reflects poorly on your credit rating, since lenders may be a little cautious about giving you money again. This is especially true if you have to declare bankruptcy through the court system. This is essentially a mass credit default because you are declaring that you can no longer pay off any of your existing debt obligations. This will produce a significant negative mark on your credit record, which may be difficult to remove. Don’t be surprised if you have a low credit score because you declared bankruptcy in the past.
Many people are curious about how long they can expect these negative credit marks to stay on their record. You should realize that FICO has existed since 1987, so they have been tracking credit accounts for over 25 years now. They will typically review an individual’s history over the past 11 years before the report is issued. This length of time can actually vary somewhat, since many people have greatly different types of credit histories. You may want to talk with a financial expert to see how you can work to improve your credit score over time. This often involves paying down any outstanding balances that you may have on cards that you own.
In all, you can expect to get a lot of valuable information when you find out your credit score. It can be very useful to understand the credit score range of these different rating agencies. When you learn what is the credit score range, you can start making plans to improve yours over time. If you would like to find out your credit score, you can click on the “Continue” button below. It will redirect you to a page that will link you up with your rating from all three major bureaus out there.