Credit Score Ranges

Credit scores are numerical expressions based on the analysis of the credit files of consumers. A credit score represents a person’s credit worthiness.  Financial organizations like banks and lending companies use credit scores in order to determine the risk of lending money to a particular individual due to bad debt. They also use it to determine who qualifies for a loan, credit limits, and what interest rates they should impose on borrowers.

 What Is A Good Credit Score Range?

Credit score is important for determining your capability of borrowing and paying money from lenders and creditors. In fact, having a good credit score can help you earn a good credit limit. However, pinning down a good credit score can be tricky as there are different types of scoring models followed in the financial industry. Below are the different credit score ranges available today.

  • Vantage score range: 300 to 850
  • FICO score range: 300 to 850
  • PLUS score range: 330 to 830
  • Equifax credit score: 280 to 850
  • TransRisk score: 100 to 900

To read the score, it is crucial to take note that the higher the number, the lower your risk for defaulting on a debt; thus you are more likely to get approved for better interest rates and credit.

 Factors That Affect Credit Scores

A credit score is a three-digit number that is used by financial institutions. There are different factors that may affect credit score ranges. Below are the different factors that can affect your credit score.

  • Open credit card use:  The open credit card use rate is the available credit that contains the information regarding how much credit you are using at a given time. It is calculated by getting the total of your credit balance and dividing it to your open credit card limits.
  • Percentage of on-time payments:  How often you make on-time payments can also affect credit score ranges.  It shows creditors and lenders that you are a reliable and responsible borrower who will pay back debts on time.
  • Derogatory marks: The number of derogatory marks on your credit score, which include foreclosure, bankruptcy and tax liens, can affect your credit score. It will take seven to ten years to clear your financial history from these negative marks.
  • Hard credit inquiries: Hard credit inquiries happen when a financial institution checks your credit to decide whether it will approve your loan. Examples of hard inquiry include auto loans, student loans, mortgage and personal loans.

Credit score ranges are very important because they allow you to get better credit limits and interest rates. It also indicates that you are a good borrower.