Credit Score Ranges

Before we start looking at the various credit score ranges it makes sense to first discuss exactly what a credit score is composed of. What criteria goes into calculating your credit score?

• The most important contribution to credit score is your on-time payment of your financial commitments. This counts approximately 35% of your total credit score. Past delinquency will most certainly lower your credit score.
• Your debt-to-credit ratio – in other words the amount of your available credit that you have actually used, counts for about 30% of your credit score. If you have maxed out all your credit this will lower your credit score as it is seen as a sign of poor credit management. The ideal ratio is 1:3 or expressed as a percentage 30%
• Length of Past Credit History – the longer you have used credit the more history there is to base a score on and this will increase your credit score. If you are new to the credit game then this will lower your score. 15% of your score will depend on your credit history’s age.
• Credit Inquiries can hurt your credit score if you have made numerous applications for credit over a relatively short period.
• Your credit mix also influences your credit score. People who only have a secured credit card will have a lower score than those with a mixture of credit cards, personal loans and revolving credit.

Now that you know what the components of a credit score is we can look at what the various credit score ranges are:-

800-850+ Credit Score Range –

This is basically a flawless credit and people in this range will be entitled to the lowest interest rates and will have no problem in securing a loan provided they have some credit history.

720-799 Credit Score Range –

Approximately 27% of consumers fall into this range and are considered excellent credit risk. They will more than likely enjoy the same low interest rates as those in the highest range but a more thorough investigation will be done on their credit history.

680-719 Credit Score Range –

Credit scores falling within this credit score range will still be considered a good credit risk but will in all likelihood pay a slightly higher interest rate than those people whose credit score falls in a higher credit score range. These people may also find that they do not qualify for all types of credit.

620 - 679 Credit Score Range =

A credit score falling in this range is already at a level that shows signs for a need for improvement. These people will pay higher interest rates and less potential lenders will be willing to grant them credit.

580-619 Credit Score Range –

If your credit score falls within this credit score range you will most probably only be able to secure credit from bad lenders and credit banks at a very high price. You will seriously need to consider ways of improving your credit score.

500-579 Credit Score Range –

People whose credit score falls within this credit score range have more than likely made serious financial mistakes in the past and have very little positive data on their credit reports. They need to take a serious look at their financial situation and take steps to remedy their credit score.

Below 500 Credit Score Range

If your credit score has fallen to 500 or less then you should seek professional help and take action immediately.