Understanding Credit Score Ranges: What You Need to Know
Credit scores typically fall within a range of 300 to 850, but variations can extend from as low as 250 to as high as 900. The specific range depends on the scoring model used to evaluate your credit.
Many people aren’t aware that they possess multiple credit scores, and the score a lender pulls might differ from what you’ve seen. How can you keep track of your scores, and which credit score ranges should you focus on? Let’s delve into the world of credit score models.
Credit Score Models
There are two primary credit score models: FICO® Score and VantageScore, each with multiple versions. FICO, in particular, plays a crucial role in over 90% of lending decisions. The most commonly used version is FICO Score 8, but variations may apply based on the credit reporting agency and your credit history. In 2020, FICO introduced the FICO Score 10 Suite, potentially impacting credit scoring.
VantageScore, introduced in 2006 by major credit bureaus (Experian, Equifax, and TransUnion), also offers different versions. Earlier versions had a range of 501 to 990, while versions 3.0 and 4.0 now use a range of 330 to 850. Your score may vary depending on the version utilized by your lender.
Understanding Credit Score Ranges
Credit scores in the United States are generally scored on a scale from 300 to 850 for both FICO and VantageScore models. Here’s a breakdown of the various credit score ranges to help you interpret your own score:
An excellent credit score, akin to an A+ in financial matters, indicates financial trustworthiness, timely bill payments, and an exceptional credit utilization ratio. FICO defines an excellent score as falling between 800 and 850, while VantageScore’s “exceptional” range extends from 750 to 850.
Good Credit Score Range
A good credit score reflects sound financial management, demonstrating that you’re responsible with your finances. Though not in the A+ category, your score remains strong, leading to favorable loan terms. VantageScore’s “good” range spans from 700 to 749, while FICO’s “very good” range ranges from 740 to 799.
Fair Credit Score Range
A fair credit score doesn’t imply dire financial straits. While it may result in occasional loan and credit card rejections, you remain in reasonable standing. FICO categorizes a “fair” score between 670 and 739, but VantageScore deems it “poor” within the range of 650 to 699.
Poor Credit Score Range
Generally, any credit score below 650 is deemed poor, yet hope remains. FICO designates the 580–669 range as “fair,” while VantageScore considers the 600–649 range as “bad.” While options may be limited and terms unfavorable, improving your credit score is attainable.
Bad Credit Score Range
FICO labels scores within the 300–579 range as “very poor,” while VantageScore characterizes the 300–599 range as “bad.” A low credit score serves as a red flag for many lenders and may impede approval. Thankfully, your credit score isn’t a fixed number, and with diligence and professional assistance, it can be repaired over time.
Keep in mind that credit scoring differs internationally, with each country having its credit reporting companies and unique systems.
Sources of Credit Scores
Credit scores are derived from data collected by lenders and creditors, reported monthly to the three primary credit reporting bureaus: Equifax, TransUnion, and Experian. Importantly, these agencies don’t share information with each other, leading to variations in credit scores across different credit reporting bureaus.
All credit scores consider five key factors:
- Payment History: Reflects your bill payment record and timeliness.
- Credit Utilization: Measures the proportion of credit you’re using.
- Credit Age: Considers the length of your credit history.
- Credit Mix: Accounts for the diversity of your credit lines.
- New Credit: Tracks recent attempts to open accounts, though it carries less weight than other factors.
While a high credit score brings advantages, it’s essential to monitor your score for inaccuracies and consider professional help from credit repair services when needed to improve your credit standing.
If you ever need expert assistance or guidance on your credit journey, don’t hesitate to reach out to the Nerds! Additionally, stay updated with the latest tips and information by following us on Facebook, Instagram and TikTok!