There seems to be a lot of confusion about credit scores. There are three main bureaus that calculate your credit score. They do not reveal the exact formulas that they use to come up with a score. What you do need to know is the range of the scores and how good your credit is considered in those ranges. Here I will show you how to do a credit score analysis on your own.
The Top Scores
• An 850 is the highest credit score you can have. Very few people get to this top number. The generally accepted range for excellent credit is between 750 and 850. If your score is within these numbers you should have absolutely no problems getting a loan and a great interest rate. From 700 to 750 is still considered very good credit. Loans should still be very easy to come by at very competitive interest rates.
The Middle Scores
• Between 600 and 700 is mediocre. The closer you get to 600 the more difficult it will be. You will be paying considerably more in interest and you may be turned down at times. You may also need a cosigner in some cases. If you've done a credit score analysis and found yourself in this range look at it this way, you're not too far from where you need to be.
The Bottom Scores
• Anything under 600 and all the way down 300 is considered bad. The 500s seemed to be where many people struggle. At this range you are not completely out but it will take some time to turn things around. If you get approved for a loan it will likely be at very high interest rates. I would consider working towards raising my credit score first. Anything below 500 is terrible. I've rarely seen scores in the 300 and 400 range. This is usually a sign of multiple repossessions, foreclosures, accounts in collections, and other various negative items.
Keep in mind that no matter how bad your credit is you can work towards improving it. This is not an overnight process and depending on how low your score is it could take months or even years. If you have done a credit score analysis and found that you are not where you need to be, do something about it. There's nothing worse than being in the exact same position that you are now years down the road.
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