Credit Score Scale

What Is My Credit Score Scale

Credit Score Scale

If you apply for financing for a home or vehicle, the terms of your loan—or even whether you qualify for a loan at all—depends on your credit score. Many people ask, “What is my credit score scale?” Credit scores range from approximately 300 to approximately 800; many lenders consider a person to have good credit if his score is over 700.

There is no simple answer to the question of “What is my credit score scale?” because lenders use a variety of scales. Although these scales are similar, they are not all the same. Some scales range from 200 to 800, while others may range from 350 to 850.

Similarly, it is difficult to predict exactly what numbers you need to qualify for the best loans because of the difference in scale. In general, lenders prefer a credit score of 700 or higher, although some lenders will accept a credit score of 650. The higher your score is, the better. You will qualify for better interest rates and lower down payments if your scores are close to the highest end of the scale.

Thus, if you are concerned about your credit, it is more important to focus on your overall credit report than on your credit score. Since you may not know what credit scale is being used, your credit score only gives you enough information to roughly estimate your chances of getting a loan. You can ask your lender, “What is my credit score scale?” but not every lender will give you specifics.

Regardless of the scale being used, your credit score will be higher if you pay all current creditors on time and do not have a large amount of debt relative to your income. In addition, foreclosures and bankruptcies can significantly affect your credit score. Focus on repairing or maintaining your credit history rather than on your exact score to give yourself the best chances of getting the type of loan you want.

Another consideration that many forget is that each of the major credit bureaus has their own credit score. Therefore, if you are looking for a credit score scale you must also consider all three of your credit scores. However, the scale is not so important, your score however is very important. We all want high credit scores, but what is a high credit score? Today a high credit score is generally anything above 720 however for an FHA home loan 660 can be good enough. The thing about credit scores is that you have to be more concerned with the type of loan you are going for than your actual score. I know this seems strange but different lenders have different criteria, and score alone is only one of the factors.

Therefore, if you are over concerned with your credit score and a hypothetical credit score chart you are missing out on the big picture. Have you seen all three of your credit reports? Do they all reflect accurate and positive information about your financial history? Your overall credit profile is a lot more than a credit score scale or credit score or any one item. Your overall credit profile is a combination of open credit accounts, closed credit accounts, revolving credit accounts, payment history on any account you've ever had and personal information including your addresses and occupations. Therefore, you see there is a lot more to be concerned with than just a credit score.

The obsession with credit scores comes from many who say that a high credit score is necessary in order to obtain the best interest rates on any given loan. An element of this is true, but if you are overloaded with debt and your income is not verifiable, the best credit score will actually do you no good. My advice is to carefully look at all three of your complete credit reports and carefully analyze all of the information being reported about you on those reports. Then after carefully reviewing them you must dispute any inaccuracies and clarify any information that is not a positive reflection of your financial history.

Again, start by analyzing all three credit reports with their corresponding credit scores. If your credit scores are all in the high 600's to low 700's you are in good shape. If your scores are lower than now, then ask the party who's qualifying you for the particular loan what their needs are. Many will allow a lower credit score provided you have other compensating features or characteristics that make up for a lower score. An example of this would be having very little outstanding debt as compared to your verifiable income. Another example is the number of accounts you have had that have reported positively over the many years you have had a credit history. Now if your credit is new you will not have this luxury. Still even with new credit, you can have a high credit score and a good credit report. If this sounds like you and you want to raise your scores, I have one bit of advice that will raise your scores instantly.

Quite simply all you need to do is pay down all of your credit cards. Many people are under the impression that having your credit cards at below 50% of the available credit is good enough to maintain the highest credit scores. This is in fact false. I've tested the results myself and from first-hand experience I can tell you that having your balances below 10% of the available credit will significantly increase your credit scores. Not only will the increase your credit scores they will increase your credit scores much higher than if you carry a balance at approximately 50% of your outstanding credit line.

If you currently subscribe to one of the services, you can test this yourself. Simply pay down your credit cards for one month and watch the results in your credit score the following month. Now you must pay attention to your actual credit re-port to make sure that the credit agency is now reporting your new lower balances. If they have not had a chance to update their records you will have to wait until the next month's report. Sometimes you can speed this up by calling the credit bureau and asking them to update this information or by calling your credit card company and asking them to report the new lower balance. Nevertheless, do not hold your breath waiting for a response. This is generally a slow process but again it works.

So do yourself a favor and do not worry about a credit score scale but worry about your entire financial portrait that is displayed by three credit bureau reports and three credit bureau scores. When you fully understand all that is contained by the three bureaus you will then be ready to work on improving your credit ratings and credit score, if in fact they need to be repaired.


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