Credit Score Range: A Beginner Guide Explaining Credit Score

Shatakshi Sinha
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Credit scores are complicated, but they’re easy to understand. It’s no wonder that about 9% of Americans are credit invisible or have no history with any of the nationwide reporting agencies.


Here’s the deal: Credit scores enable lenders to measure your credit riskiness. 


A higher credit score means you’ll have a lower chance of getting denied for a loan or credit card, which leaves you with more options. 


If you want to go into business or buy a home, your credit score is significant because it can make or break whether or how quickly you get approved for loans and credit cards (and how much interest you pay).

What Are the Credit Score Ranges?

Two types of credit models offer different scales/ranges for credit scores, namely, the FICO Credit Score Model and the VantageScore Credit Score Model.


In the past, credit scores were based on the FICO Credit Score Model. However, more and more lenders have begun to use the VantageScore model to determine a borrower’s creditworthiness. 


You should check with your lender to find out which model they use and how it differs from the other.


Here’s an overview of both credit score models, how they are scaled, and their respective ranges.


FICO Credit Score Model

The FICO credit score range is an important piece of information for consumers. Lenders use it to determine your creditworthiness and make lending decisions.


Bill Fair and Earl Isaac of the Fair-Isaac and Company developed the FICO score model in 1989, which measures multiple aspects of your credit history. This includes how long you’ve had accounts and what type of account you have, like a credit card or mortgage. 


The model also incorporates other factors like how much money you owe on your credit cards and how long it’s been since you paid off any debt.


The resulting number ranges from 300 to 850, but most lenders will use scores between 500 and 699 when considering loan applicants. 


The higher your score, the better your chances are at getting approved for a loan—but not all lenders use the same criteria when determining whether or not to approve a loan application.


Below is the range for the FICO Credit Score Model:

This range is the best of the best. A FICO credit score of 800-850 means you have an excellent credit and payment history. 


You don’t have any recent late payments, collections, or bankruptcies on your record. But you have some debt that is more than three months old and less than six months old.

This range is pretty good! A FICO credit score between 740-799 means your score is above the middle of the pack for most people with similar credit histories. 


You’re close to having excellent credit, but you still have some debt older than six months or over three months old.

Your FICO Credit Score is likely between 670 and 739 if you have good credit. It means that your credit report contains at most 3 inquiries, no late payments, and only 1 closed account within the past 12 months.

Your FICO Credit Score is likely between 580 and 669 if you have fair or average credit. It means your credit report contains at most 4 inquiries within the past 12 months and only 1 closed account within the past 24 months.

If your FICO Credit Score range is 300 to 579, you have a poor or bad credit score.


Getting approved for new loans and credit cards can be challenging if you have a bad or poor credit score. You may also find that your interest rates are higher than usual and getting approved for home loans or refinancing existing ones takes a lot of work.

VantageScore Credit Score Model

The VantageScore credit score model, created by the three major credit reporting agencies in the United States, is a scoring system that ranks a consumer’s credit profile on a scale from 300 to 850.


The credit score ranges from 300 to 850 and represents an individual’s total credit history—including their payment history, types of accounts, and overall financial health.


The VantageScore model has existed since 2006, so it’s been used for over 20 years. The model was created to help lenders evaluate borrowers’ risk-adjusted credit histories, considering factors like payment history and length of credit history.


The VantageScore model provides an alternative way to measure a consumer’s credit risk because it considers both payment history and overall financial health as it determines each individual’s creditworthiness. 


According to the VantageScore model, consumers with lower scores will likely default on their debt obligations. The VantageScore model also considers the type of accounts you have—a mortgage or a car loan, for example—and how long ago you opened those accounts (or paid off balances).


The VantageScore Credit Score Model ranges credit scores on a different scale when compared to the FICO model. 


Here are the ranges for the VantageScore Model:

Suppose you have a VantageScore of 781 or better. In that case, you’re in pretty good shape—and even if it’s not relatively as high as that yet, don’t worry: Experian says that if you can get your score up to 800 or higher, you’ll start seeing the benefits of this great score immediately. 


So, go ahead and research how to improve your credit score, and get back to us in 6 months with an update!

The formula used by VantageScore is similar to FICO scores: it considers how long you’ve had credit accounts and how much you owe each creditor. 


However, unlike FICO scores, VantageScore doesn’t consider Very Good Credit Scores in its calculations because they aren’t considered as important as Excellent or Good scores.

According to VantageScore, a good credit score falls between 661 and 780. If you have a good credit score, you’ll be able to get the best interest rates and rewards on loans, credit cards, and other types of accounts. 


You’ll also be able to qualify for lower interest rates on car loans and mortgages. A high credit score can make it easier to get things done because lenders will see how well you manage money and debts.

If your VantageScore credit score is between 601 and 660 (fair), you’re also in good company. 


According to VantageScore, the average American’s credit score is 630, which means that most Americans have scores closer to this range than they do to scores lower or higher.

If your VantageScore credit score falls into a bad category—a score between 300 and 600—then you’re in the minority: only a tiny percentage of American households fall within this category.

What Factors Impact Your Credit Scores?

Your credit score is a number that financial institutions use to determine whether you’re a reasonable risk for loans and other financial products. 


Your credit score is based on the debt you owe, how new debts impact your credit, and your payment history.


Many factors affect your credit score, but there are four main categories:

When it comes to your credit scores, the amount of debt you have can impact them in various ways. For example, if you have more than 30% of your available credit line in debt, your credit scores will be lower than if you have less than 20%.


Additionally, the amount of time since you last paid down any debt will affect your score. If you have not made any payments for more than two years, your credit scores will be lower than if you have made payments in that time frame.

The payment history section of your credit report is where you need clarification regarding past due and late.


Past-due accounts have been sent to collections or have gone through bankruptcy. They generally have lower credit scores than other accounts on your report, but they can only be removed from your file if you pay them off.


On the other hand, late accounts have been sent to collections but still need to be paid in full. These can come back up on your report if there’s a hold on the account or if it’s closed by law enforcement.


Both types of accounts can hurt your credit score—however, the effects differ for each type.


Past-due accounts will decrease your score by 10 points per month until paid off in full, while late accounts will decrease your score by 25 points per year until paid off in full.

The length of your credit history is one of the most important factors that impact your credit scores. The longer you have been in the credit system, the more likely your score will reflect that. 


If you can prove how long you’ve been a responsible borrower, it could help you get a better interest rate on your loan or even save you money by lowering your monthly payment.


Your score also depends on how much debt you owe relative to the available credit. If you carry significant balances, they will show up in your score, making it look like you don’t have enough available credit to function effectively in the market.

New credit can have an immediate impact on your credit score. When you apply for credit, the most important factor is how much you pay down your card balances. 


We recommend setting up automatic payments for at least some of your purchases to ensure that you’re paying off your charges in full each month and in the correct amount (that is, not too much).


Credit utilization rate is also a significant factor in determining your credit score. If you have a high percentage of balances paid off, this will positively impact your score.


In addition to these factors, it’s essential to remember that other factors can impact your credit score, like bankruptcy or foreclosure history.

There are a lot of factors that impact your credit score, but the most important ones are the ones that you can control.


The credit mix determines how much of your available credit and how much debt you have on different types of credit. 


The more people or businesses who lend money to you at once, the higher your credit score will be. The more debt you have from different lenders, the lower it will be.


If you have many new credit cards open and low balances, this could lower your score. If you only have one or two major lenders paying their bills on time, this could raise your score.

The debt-to-credit ratio is a metric lenders use to evaluate your financial health. 


It’s calculated by dividing a person’s current debt by their available credit and subtracting that number from 100%. The higher the number, the worse off you are financially.


This is an essential factor because it can affect your credit score. Your credit score consists of three main components: payment history (35%), collection accounts (30%), and new credit (15%). 


If you need more positive marks on your report, then your debt-to-credit ratio will be higher than what lenders like to see.

Factors That Don’t Affect Your Credit Scores

If you’re wondering why your credit score isn’t as high as you’d like it to be, don’t worry! There are plenty of factors that don’t affect your credit scores.


Here are some of the most important things to know about how your credit scores work and what doesn’t affect them:

Salaries are one of the factors that don’t affect your credit scores. It’s common for people to think that if their salary drops, it will affect their credit scores. However, this is not the case.


Your credit scores are based on two main factors: how much you owe and your available money. The only way that your salary can affect either of these is if you’re paying off debt with lower wages or less disposable income.


If your salary continues to rise and fall in line with general inflation rates, then there’s no reason why it should affect your credit score negatively.

If you’re married, your credit scores will not be affected. However, there are some situations where your spouse’s credit history can hurt your credit score. That is because marriage is a common factor used by lenders to determine whether or not they will grant you access to an individualized mortgage.


Married couples have a higher chance of having joint accounts than single people. Also, separating finances between two households can be hard if you are married because one spouse might not want to give up control of their account. 


If both spouses want to keep the same bank account, then this could result in a lower credit score for the couple. Otherwise, your credit score will not be affected.

Even if you have not been approved for a credit card or loan, you can still improve your credit score. With the right approach and patience, you can build up your credit history and improve your score.


If you’ve been denied credit from a lender, there are steps you can take to improve your chances of being approved in the future. 


The first thing to do is check your application carefully, looking for any mistakes on your part or information that should have been provided to the lender. 


Then, contact the lender and ask if they could re-review your application. They could give you more time or extend their deadline to get it right this time around.

If you’re a debit card user, you might wonder how this impacts your credit card’s scoring. The answer: not at all. Most banks now allow you to use your debit card as a form of payment for purchases on your credit card account.


This doesn’t mean that using a debit card is a good idea—it’s still best to avoid using this type of account to make purchases on your credit card. 


It may not make much difference whether or not you use your debit card when paying off debt, but it can significantly impact how much money you spend each month and how much debt you carry!

Seeking the help of a credit counselor won’t negatively impact your credit score. On the contrary, it will help you if you have bad credit.


It’s hard to imagine that you may need a credit counselor, but if you do, the good news is that your local credit counseling agency is there to help. 


Federal law requires that every state have at least one credit counseling agency to offer free services to people with bad credit. 


These agencies are designed specifically for people with bad credit and can help you with everything from consolidating your debts to finding ways to improve your overall financial literacy.

High-interest rates can significantly impact your credit scores, so paying attention to the overall balance of your credit accounts is essential. High balances on multiple accounts and paying high-interest rates affect your scores negatively.


If you have multiple credit cards with high balances, consider consolidating them into one or two low-cost cards. Consider lowering the balance on those cards to avoid incurring additional fees.

How Can I Check and Monitor My Credit?

You can check your credit to know how much debt you have and how it’s affecting your life.


There are three ways to check your credit:


  • You can use an online credit report to see what’s reported about you by major reporting agencies like Equifax, Experian, and TransUnion.

  • You can get a free copy of your credit report from each major agency every year at Annual Credit Report. They’ll also send a free copy to any other agency that requests it, but only if they don’t already have your address on file for another reason (like a loan).

  • Suppose you’re not comfortable with any of the above options. In that case, you can get a free copy of your credit report from each of the major agencies every year by calling their hotline or visiting the Annual Credit Report website and entering a PIN sent by mail after submitting an online application form (you’ll be asked for that information when you apply).

The easiest way to get an accurate picture of your current credit situation is through online tools such as Credit Sesame or Credit Karma. 

These services will provide detailed reports on your credit score, including graphs showing trends over time so that you can see if your credit score is excellent, good, or poor.


A bad credit score range is below 500 for the FICO model and below 600 for the VantageScore model. A bad credit score range is generally considered the worst, though this rule has some exceptions.

A poor credit score range is between 500 and 350 for the FICO model and 600 and 350 for the VantageScore 4.0 credit score model. These scores are generally considered sub-par regarding their ability to qualify for loans or other types of credit products.

A fair credit score range is the same as a poor or bad credit score. This is the least common credit score range and represents terrible student loan repayment potential and a high chance of defaulting on debt payments in the future.

A good credit score range shows you have a good credit history. Your credit score will fluctuate based on your credit history, but the more time you have spent with your credit, the better it will be for your future.

An excellent credit score range shows you have a great credit history and are not likely to get rejected by lenders or lenders’ financial services. 


Once you have reached this score, you can apply for loans at lower interest rates, which ultimately means cheaper payments over time.


Credit scores are a powerful tool for determining financial well-being. The higher the score, the better your ability to pay down debt, make purchases, and borrow money.


The three most common credit score ranges are excellent, good, and poor credit scores. 


However, we should not take credit scores too literally—credit scores do not tell us everything about a person. A high credit score helps you get lower monthly payments on your loan, and you could qualify for an auto loan without paying any down. 


If you want to improve your credit score, consider using a service like Credit Karma or TransUnion that can help you ensure you’re getting rid of any errors in your credit report.

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