Figuring out credit scores and how they are calculated can be difficult to understand. Also, there is a need to know how the three major credit reporting bureaus use these scores to determine whether or not you are extended some type of financial credit. Credit scores are assigned to a person based on their credit history.
Credit Scores are also known as FICO scores. FICO stands for Fair Isaac and Company. Information that determines your credit score comes from the three major credit reporting bureaus, credit card companies, banks and other financial companies that you have loans with and some data bases that report consumer data. This information is a measure of your past history of making payments and how likely you will pay back what you borrowed. All of these factors are added together to determine if you are credit worthy and if so, what your interest rates will be.
The higher your credit scores, the more financial resources you will qualify for and the lower the interest rates will be on the account. FICO scores have a range from about 300 up to 850 points. The points are divided into six point groups:
720 – 850
700 – 719
675 – 699
620 – 674
560 – 619
500 – 599
For those with credit scores that are 720 and above, they are considered to have excellent credit and are very likely to receive the best offers and interest rates. Those with credit scores from 675 – 719 should still be approved for financial resources and may have to pay slightly higher interest rates than those with excellent credit. For credit scores that fall between 620 – 674 the options to borrow money or qualify for credit cards will be reduced and if approved, approved with high interest rates. Any credit score below the 620 mark are considered risky and if qualified to receive any type of credit, will pay very high interest rates.
Credit scores will also affect other areas of everyday life. Auto insurance rates for those with lower credit scores may be higher than those with higher scores. It has been determined statistically that those with lower credit scores are more likely to file accident claims. This fact increases the cost of the insurance premium that people with low scores will pay. Getting a job and renting or the ability to sign a lease may also be difficult for those with low credit scores. The history of meeting financial responsibilities affects ones qualification to receive and be approved for many aspects of things requested and necessary in one’s life.
For More Information on this and other Credit Issues, please go to www.Bad-Credit-Options.com
By: Teresa Davis
About the Author:
Credit Scores are also known as FICO scores. FICO stands for Fair Isaac and Company. Information that determines your credit score comes from the three major credit reporting bureaus, credit card companies, banks and other financial companies that you have loans with and some data bases that report consumer data. This information is a measure of your past history of making payments and how likely you will pay back what you borrowed. All of these factors are added together to determine if you are credit worthy and if so, what your interest rates will be.
The higher your credit scores, the more financial resources you will qualify for and the lower the interest rates will be on the account. FICO scores have a range from about 300 up to 850 points. The points are divided into six point groups:
720 – 850
700 – 719
675 – 699
620 – 674
560 – 619
500 – 599
For those with credit scores that are 720 and above, they are considered to have excellent credit and are very likely to receive the best offers and interest rates. Those with credit scores from 675 – 719 should still be approved for financial resources and may have to pay slightly higher interest rates than those with excellent credit. For credit scores that fall between 620 – 674 the options to borrow money or qualify for credit cards will be reduced and if approved, approved with high interest rates. Any credit score below the 620 mark are considered risky and if qualified to receive any type of credit, will pay very high interest rates.
Credit scores will also affect other areas of everyday life. Auto insurance rates for those with lower credit scores may be higher than those with higher scores. It has been determined statistically that those with lower credit scores are more likely to file accident claims. This fact increases the cost of the insurance premium that people with low scores will pay. Getting a job and renting or the ability to sign a lease may also be difficult for those with low credit scores. The history of meeting financial responsibilities affects ones qualification to receive and be approved for many aspects of things requested and necessary in one’s life.
For More Information on this and other Credit Issues, please go to www.Bad-Credit-Options.com
By: Teresa Davis
About the Author:
Paulina Mintey
