What is the credit score scale and how do you know whether you have a good or bad credit rating?
Well, the credit score scale may seem dark and mysterious, but it really isn’t all that complicated. Here is what you need to know about your credit score and the credit score scale.
The credit score scale ranges from three hundred (300) to eight hundred and fifty (850).
That means that if you are alive and there are records of you, there is no way you can have a credit score less than 300.
If you have only a little bit of debt, you have had it for a long time (many years), and you have never missed a payment or been late with a payment, and you have an income, you might just have the perfect score of 850. Of course, very few people have either the lowest or the highest possible score; just about everyone falls somewhere between the two extremes.
If you want to fall at the very top level of the credit score scale, you should shoot for a rating of at least 720.
At one time in the not too distant past, you may have been considered at the top of the game is your score was above 680, but no more. Just about every lender gives the best terms and interest rates only to those whose credit score falls above 720 on the scale.
If you know you have only some minor issues in your background that will negatively impact your credit history, you may fall somewhere between 680 and 720. If that is where you land on the credit score scale, you can probably find a bank or other lender who is willing to give you a decent loan that won’t cost you an arm and a leg in interest.
If your score is between 630 and 679, you may find that you have to settle for loans that are not as flattering as those offered to the folks at the top of the credit score scale.
In fact, some lenders may not be willing to offer you a loan at all. Most likely, though, you will be able to secure a loan if you really need one, are diligent about finding a lender, and are willing to pay a higher interest rate.
If your ranking is below 630 on the credit score scale, you will probably have a very difficult time getting a home mortgage or loan for a new automobile.
Before you consider applying for these types of loans, you should definitely get a copy of your credit report and make sure that any mistakes are cleared up, and you should definitely make as many improvements to your credit score scale rating as possible.
In addition, remember that these are only guidelines, and that the policies of different lenders vary.
What one bank considers “too risky” may be within the acceptable limits of another lender. So it also pays to shop around for the best deal you can get, no matter where you fall on the credit score scale of life.