There is often a lot of confusion when it comes to credit score ranges. One of the problems is that you have many different credit ratings. It is therefore difficult, but not impossible, to determine in which credit range you fall. Knowing your credit status starts with finding out your credit score.
I’ll pull back the curtain so you can have a clear view of your credit score range in all its glory. Well, let’s hope it’s glorious!
What is a credit score?
Your credit score is a measure of your creditworthiness. When you apply for credit, a lender typically requests your credit score from each of three credit bureaus: Equifax, Experian, and TransUnion. Credit scores are calculated based on the contents of your credit files at each office. Sometimes creditors report your payment history to only one or two offices. This can result in different credit ratings at different bureaus.
As if that were not enough, there are also different versions of partitions. The most commonly used credit scores are FICO and VantageScore, which range from 300 to 850, but there are also many versions of these credit scores. Even though the scoring algorithms for FICO and VantageScore look at similar factors, they weigh them differently. This means that you cannot directly compare your FICO score to your VantageScore.
But with both types of scores, the higher your score, the less risky you appear to financial institutions. So if you have a FICO score of, say, 760, that tells the lender that you’re likely to repay a loan or credit card debt.
Another difference between FICO and VantageScore is the time it takes to generate a credit score. VantageScore favors those new to credit because you can generate a score after you’ve had credit for at least a month. With FICO, it takes about six months of payment history reported to the bureaus before you have a credit score.
Next, let’s look at what affects your credit score.
What affects your credit score?
Although both FICO and VantageScore are based on data from your credit reports, the main differences between the two are the weights given to different consumer behaviors.
For FICO, here are the factors that impact your score and their respective weights:
- Payment history: 35%.
- Amount: 30 %.
- Length of credit history: 15%.
- Composition of credit: ten%.
- New credit: ten%.
VantageScore looks at a variety of factors and rates them based on their influence on your score. Here are the key areas that impact your VantageScore:
- Payment history: Extremely influential.
- Age and type of credit: Very influential.
- Percentage of credit limit used: Very influential.
- Total balances and debt: Moderately influential.
- Recent credit behavior: Less influential.
- Credit available: Less influential.
What are the credit score ranges?
Credit decisions are made based on many factors, not just your credit score. But identifying your credit score range helps you decide if it’s high enough for the type of credit you’re applying for. For example, if you want a rewards credit card that requires very good credit, but you only have fair credit, you’ll know you need to improve your score before you apply.
Here are the FICO credit score ranges:
- Exceptional: 800 and more.
- Very good: 740-799.
- Good: 670-739.
- Fair: 580-669.
- Poor: 579 and below.
As I mentioned before, even though VantageScore has the same numerical ranges as a FICO score, they cannot be compared head-to-head. Here are the credit score ranges for VantageScore:
- Excellent: 781-850.
- Good: 661-780.
- Fair: 601-660.
- Poor: 500-600.
- Very bad: 300-499.
You can see how credit brackets differ by looking at fair credit, for example. If you have a FICO score of 600, you fall within the fair credit score range. But a VantageScore of 600 is considered a bad score. The credit ranges between the two types of scores overlap, but there are also differences when trying to determine your credit status.
Basically, just know what score you’re trying to perform. Most websites have a disclosure statement that reveals which score is used and which credit bureau provided the score.
How to check your credit score
There are many ways to view your credit score. Most major credit card issuers offer a free credit score with your monthly statement. Some offer them whenever you want to know your credit score.
There are also several websites that offer free educational credit scores. These are usually VantageScore, but that also has value. Now that you know how to identify your credit status, whether it’s a FICO score or a VantageScore, you can use your score to help you make smart credit decisions.
You can also pay your FICO score at myFICO.com. Be careful not to accidentally sign up for a credit monitoring service, or you’ll end up paying a monthly fee.
How to monitor your credit
In addition to understanding where you fall in credit score ranges, you also want to review your annual credit reports. You can request a free annual credit report from each of the three credit bureaus at AnnualCreditReport.com. Note that your credit report will not include your credit score. So seeing your credit score and getting your credit report are two different actions.
Reviewing your credit report can help you identify ways to improve your credit score. It also helps you identify fraud. For example, if you see a credit account that you did not open, you should immediately report the fraudulent account to the credit bureaus.