What Is The Credit Score Range?
Credit scores generally range from between 360 to 850 at the high end. Within each range there are different levels of creditworthiness that lenders use, and they range from 360 being the worst end of the range to up to 850 being the strongest and max credit score. This is important to know when you look at things like how to improve my credit score and what credit score do I need to buy a car or work with credit scores for mortgages and credit scores for credit cards.
Having a good credit score nowadays is very important when applying for an apartment or a mortgage. But just what is the highest credit score, and why is it that some people have the highest credit scores while others have the lowest? Any good credit score above 740 is excellent and will most likely give you access to some of the best rates on major financial products. But what kind of financial product can qualify for that lofty score?
The next question that would probably pop into your head is that of the FICO score. The FICO score is based on data from the credit report of a person. If a person has a good credit score they are considered a low risk borrower which makes them good for loans and possibly other types of credit as well.
BUILD CREDIT FOR YOUR BUSINESS
But credit scores aren’t the only thing that make up FICO. Other factors make up the FICO scoring model including the number of accounts, length of time you’ve had credit established, whether or not you’ve paid bills in full and any type of payment errors. These errors are referred to as the extraneous factor. The extraneous factors are then subtracted from your FICO so that the “raw” FICO can be calculated.
So now you’re probably wondering just what the highest credit score possible is. Is it 740 or even higher? That depends on several factors. Some of the factors that determine a FICO score are the amount of credit you have, your payment history, your credit inquiries, the amount of current debt you have and the types of credit you have.
A good credit score will range between around 800 and900. A low one could be as low as about 650. If you qualify for some government aid such as student loans or automobile grants you will likely have a lower FICO. The lower your FICO, the better your credit ratings will be.
What does this all mean for borrowers? It means that if you have higher than average credit scores, you will have more options available to you. It also means that you will be able to get better terms on your loans. The terms you get will likely be less expensive. And you’ll be able to get better interest rates. A good credit score will help you secure better interest rates on the credit cards you have, the mortgage loans you have and even the car loans you may be considering.
BUILD CREDIT FOR YOUR BUSINESS
But do keep in mind that credit scores don’t affect loan approval at all. Approval is determined by other factors and is unrelated to how high your credit scores are. Borrowers who have low FICO ratings are often put into a high risk category when it comes to getting loans approved. That’s why lenders often offer better terms and conditions to those with lower FICO ratings.
If you have a lower FICO than the lender you’re considering, you can request a copy of your credit report from each lender to see what they say about you. If you find negative information on your credit reports that you believe is due to hard inquiries by other companies, you should take steps to have the negative information removed. You can ask each company individually if they will remove hard inquiries. If not, then you should contact the lender directly and make the dispute about hard inquiries on your credit report.