Your credit score is the first thing that the lender calculates before they make decision. Learn more about credit score, so you would get better credit offers.
What is a Credit Score?
Whether you are a lender or creditor in a bank, you must have heard about credit score before. But, do you really know about it?
In general, when you request credit from the bank, the first thing that they would evaluate is your credit score. You must have realized how some credit applications are approved while the others are not, or why only several people get better interest rates with fewer fees. Yes, that is all depending on the credit score.
Basically, credit score determines the creditworthiness of the creditor. It is scored based on your personal financial data, including credit history accounts or payment history. While you can calculate the estimation of your credit score, it is hard to know the exact number as different credit agency has their own method and standard.
What is a Good Credit Scores?
When you have good credit scores, you will get a better credit offer. For instance, a higher credit score will give you a better chance of getting a home mortgage. So, back to the question, what is a good credit score?
Generally, if your scores are between 690 and 719, then you have a good credit score. Above them are excellent credit score while below 690 to 630 are considered a fair score. If your score touches 629 or lower, that means you have a bad score.
Then again, different agencies might have different score ranges, yet those above are the average standards.
So, what is a FICO score?
You have known how varying credit score standards for every agency and one of them is called FICO score. Initiated in the 1950s, FICO score concept came from Fair Isaac Corporation, a data analytic company in California. From credit card companies to mortgage loans, nearly 90% of U.S. lenders use FICO score as their standard.
So, how is FICO score range credit?
While previous credit score ranges that we have stated before are divided into four categories, FICO credit score is more specific. The lowest scores (very poor) are between 300 and 579. Above them, there are fair scores in the range between 580 and 669.
Good FICO Score start from 670 to 739 and above those ranges are categorized as very good. You will have the best credit offer if your scores are above 800, which means you have an exceptional credit score.
FICO score vs Vantage score
In terms of maximum and minimum score, there is no difference between FICO score and Vantage score. The most apparent difference is the categories. FICO score ranges are divided into very poor, fair, good, very good, and exceptional, while Vantage score use very poor, poor, fair, good, and excellent category.
How to Improve Your Credit Scores?
Yes, higher credit scores mean a higher chance to get your loan approved, lower interest rates, and so on. The question is, how to improve your credit score?
In fact, it is quite easy. Just remember these three tips. Pay your bills on time, do not cancel credit cards, and avoid going over your credit card’s limit.
How about it? Have you now understand about credit score?