What is Your Credit Score Range and what does it Mean?

Perhaps you do not know your credit score, but you have been told that you have good credit, bad credit or poor credit. What do these terms mean and what scores fit in each credit score range? Credit scores range from 300 to 900, although it is very rare to see a credit score above 850. Your credit score range will affect the interest rate you will be required to pay for loans. The lower your credit score range, the more you will have to pay for things you purchase on credit.

Since credit scores can change daily, lenders are often more interested in your score range rather than your individual score.

If you were told that you have flawless credit it probably means that your credit score is above 800. This credit score range qualifies your for the best rates for auto loans. You will also get the best rates for auto insurance and have no difficulty in qualifying for a home loan. You have done well at keeping your record spotless and will be rewarded for your fine work.

Credit scores in the excellent range are normally between 720 and 800. These scores will still qualify you for great rates on loans. You have no reason to worry about your credit, as long as you continue to pay bills on time, it will only get better. You should be getting excellent interest rates in this range.

Good credit scores are in the 680 to 720 range. While these scores are not perfect, they do qualify most buyers for car loans, even though you may have to pay more in interest charges.

Okay credit scores range from 620 to 680. Persons that have scores in this range see even more credit restrictions on the loans for which they qualify. While they may be able to get car loans easily enough, the interest rates will be higher.

Scores below 620 are considered to be bad credit. As long as your score is above 580, you may qualify for loans, but the choice of lenders is more limited and the interest rates climb once again.

Scores drop below 580 because of a major infraction such as a judgment, charge off, collection or bankruptcy.

Very poor credit is reflected by scores that are below 500. There are major marks against one's credit rating. In addition, there will be very few positive marks. People in this range will find difficulty when trying to get a vehicle loan or credit cards and may be forced to pay premium prices for automobile insurance.

If you have a poor credit score getting financing isn't the only thing you have to worry about. More and more employers are using credit scores as a means of judging the merits of potential employees. This may seem a bit discriminatory, but there is a direct correlation between poor employee work habits and poor credit scores. So, that's one more important reason to keep your credit in good standing.

If your credit score is below the point you want it to be, there are some steps you can take to get it into the credit score range you desire. Begin by paying all bills on time to build some positive credit history. The derogatory information will cost less in credit score, as it becomes older and in seven years, all of the derogatory marks will drop off your credit report. Every month that bills are paid on time will improve your credit score. If you do not see the improvement that you want, consider seeking professional help to increase your credit score.

Credit Score Range
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