March 14, 2017
Do you know your credit score? If so, congratulations! You’re among the 40% of Americans who do, according to a LendingTree study.
However, knowing your credit score is one thing—understanding it is quite another. In that same study, only 10% of Americans actually understood their score and what makes a perfect one.
In reality, the actual face value of your score is less important than which credit score range category it falls under. Knowing where you place in the credit score range categories (and why) will help you better understand your overall creditworthiness. Furthermore, this allows you to evaluate short- and long-term opportunities on your credit journey.
It’s important to understand the variety of different credit score calculations which may place you in different credit ranges. While FICO® and VantageScore® scores are used most frequently, several variations of these credit score models exist. Which score lenders decide to use depends on which factors they determine are most important when considering an applicant for credit. However, while the scores may vary slightly between the different providers, the data is drawn from the same place: your credit report.
The following credit score range overview breaks down which scores fall into which category and what it says about your financial health. These numbers are based on the popular FICO score range*:
Very Good to Excellent (740 to 800+):
Poor and Below (579 and lower):
Your credit score may seem to be the only significant factor when applying for credit, but it’s actually just one of several pieces of information that impact your opportunity for being approved. For example, your capacity to repay and whether or not there is any collateral should you default, are other important considerations.
You can help keep your finances (and credit scores) in a healthy range by using smart tools like the Credit One Bank® mobile app—where you can make payments, monitor your account, and stay on top of your credit score from one easy place.
*INDUSTRY RULE OF THUMB THAT MAY VARY BY LENDER AND CREDIT BUREAU
As credit scores have become more available and accessible, consumer interest in them has grown—but so has consumer confusion. Most people don’t understand the differences between credit scores, and many don’t know the difference between credit scores and credit reports. Throw in credit reporting agencies, and it gets even more confusing.
Whether your credit score is excellent, good, fair, or poor, you never want it to go down. Of course, there are guidelines you should follow if you want to maintain a healthy credit score, starting with the most important thing you can do: