Your Credit Score

Your credit score is a number in the range 300 to 850 that represents a statistical analysis of your credit files and gives lenders, banks and credit cards companies a representation of your credit worthiness. This information comes from a credit report provided by credit bureaus, the three major ones being Experian, Trans Union and Equifax.

The most widely known credit score is known as FICO, so named as it was developed by the Fair Isaac Corporation. Now, each credit bureau has its own score Equifax’s ScorePower, Experian’s PLUS score, and TransUnion’s credit score.

Credit scores can be purchased from credit bureaus or are available for no cost when you subscribe to a credit report monitoring service which are available from credit bureaus or other third parties.

So what does your credit score mean?

A credit score of 499 or less means you are considered very risky. You would be in group D and there would probably have been foreclosure, liens or credit judgements in your history. You may be eligible for a loan, but you would be penalized with high rates of interest. Approximately 1% of the US population falls into this category.

A credit score between 500 and 599 would be considered risky and categorized in the C group. Once again, you could still qualify for a loan, but your interest rate would probably be at least 2% higher than those whose credit score is higher. Approximately 12% of the US populations falls into this category.

A credit score of between 600 and 699 is considered to be good credit and is categorized as group B. As far as loans are considered, they are easily available, but you will not qualify for the best interest rates and terms. Approximately 27% of the US population falls into this category.

A credit score of above 700 is considered to be excellent credit, and would put you in group A. Loans and mortgages will be freely available with the best interest rates and terms available. Approximately 60% of the US population falls into this category.