Learn that a credit score is a three-digit number, usually on a scale of 300 to 850, that estimates how likely you are to repay borrowed money and pay bills. See below for more detailed information.
Credit scores are calculated from information in your credit accounts. That data is compiled by credit reporting agencies. The three largest bureaus are Equifax, Experian and TransUnion.
Credit scores are of utmost importance in every person’s credit life, whether you get a loan or a credit card, what interest rate you pay, and so on.
A higher credit score can give you access to more credit products or services, and lower interest rates. Borrowers with scores above 750 or higher often have many options, including the ability to qualify for 0% auto financing and credit cards with 0% introductory interest rates.
So if you didn’t know how important credit scores and ranges were and how they work, here you will learn about how important they are and how they impact your credit.
Creditors or companies set their own standards on what scores they will accept, but here are some examples:
A score of 720 or higher is generally considered excellent credit.
A score between 690 and 719 is considered good credit.
Scores between 630 and 689 are considered fair credit.
And scores of 629 or less are considered bad credit.
In addition to your credit score, factors such as your income and other debts can play a role in creditors’ decisions about whether to approve your application.
Many people wonder why scores from different credit bureaus are different, but the reasons are thought to be obvious, nevertheless, we show the score difference between FICO AND VantageScore.
Two companies dominate the credit rating. The FICO score is the best known score. Its main competitor is VantageScore. In general, both use a credit score range of 300 to 850.
FICO and VantageScore extract the same data, only the information is slightly different. A score is a snapshot, and the number may change each time you check it.
Your score may vary depending on which credit bureau supplied the credit report data used to generate it. Not all creditors send account activity to all three agencies, so your credit report from each is unique.
Each company also has several different versions of its scoring formula. The most commonly used scoring models are VantageScore 3.0 and FICO 8.
