Nearly every financial decision that you will make will somehow be linked to the credit score that you have in the three major credit bureaus. That’s why it becomes very important for you to understand how your Credit Score Scale may be calculated, what can make it go up and down and what is considered a reasonable or a good credit score for you to maintain.
The major credit score that you’re going to see in use today is the FICO credit score. What the FICO does is place your credit in a three digit range that may range between 300 and 850 points. The better your credit, the higher your FICO number will be. If your FICO score is considered to be more than 720, while one which is below 600 will be considered to be very poor. The good news will be that if you have a FICO score that is over 720, your rates are not going to be a great deal different than if your scores were at 850.
The goal will be for you to put your credit score into a range that is between 700 and 850, in order to get the best possible rates. Your credit score scale should be ideally between 725 and 800 in order for you to get outstanding rates on your credit. Loans, credit cards, and other credit company offerings will be much lower when your credit scale is a little higher.
If you are able to wait, the best idea for you will be to not apply for credit until your score is a little better. You can clean up some of the smaller problems on your credit by paying off the minor issues or beginning to make payments and then waiting a month or two before you apply for the credit that you want if it is possible to do so.
The credit score scale typically runs this way:
o 720-850: Prime Credit Rating
o 700-719: Good Credit Rating
o 675-699: Moderate Credit Rating
o 620-674: Below or Sub-Prime Credit Rating
o 560-619: Poor Credit Rating
o 480-559: Extremely Poor Credit Rating
Five different things go into the credit scale which will factor into what kind of credit rating that you have. If you pay on time, that is the largest part of your credit. The payment history includes how many overdue payments you have made and if you paid off in a timely way. The amount that you ow also factors into your credit rating scale. The length of time that you have had credit is a portion of your rating, but only a very small portion. It measures about 10-15 percent of your credit rating.
The kind of credit accounts that you have also factors into the Credit Score Scale and tells your creditors how you use your credit.