The Credit Score Range Scale
There are many different credit scores available to lenders, and they each develop their own credit score range. Why is that important? Because if you get your credit score, you need to know the credit score range you are looking at so you understand where your number fits in.
The Credit Score Range Using Various Scoring Models:
- FICO Score range: 300-850
- VantageScore 3.0 range: 300–850
- VantageScore scale (versions 1.0 and 2.0): 501–990
- PLUS Score: 330-830
- TransRisk Score: 100-900
- Equifax Credit Score: 280–850
With all of the scores listed above, the higher the number the lower the risk. That means consumers with higher scores are more likely to get approved for credit, and to get the best interest rates when they do. And they are more likely to get discounts on insurance. What is considered a “high” score depends on what type of score is being used.
If your FICO score is 840, for example, you’re just 10 points shy of the highest score possible and your credit is “superprime.” But if you have an 840 VantageScore (using version 2.0), it’s not as spectacular because you’re 150 points away from the highest possible score.
What’s Your Score?
Don’t assume your score is good (or isn’t) just because you have always paid your bills on time (or haven’t.) The only way to know whether you have a good credit score is to check. Get your credit monitoring today.
How Are Credit Scores Generated?
Credit scores compare factors like payment history, debt levels and the age of credit accounts to figure out what consumers who pay their bills on time have in common. The goal is to predict how new and existing customers will handle credit.
Ultimately then, a credit score summarizes the information in your credit report, which makes it easier and faster for a lender to process a loan application and make a determination as to how likely you are to pay back the loan in question.
The Benefits of a Good Credit Score
A good credit score will help you borrow money for a car or home, or open a credit card with a comparatively lower interest rate. That means you will pay less over time for the money.
Consider this: if you’re buying a $300,000 house with a 30 year fixed mortgage, and you have bad credit, then you could end up paying more than $90,000 more for that house over the life of the loan than if you had good credit.
So, in the end, it really pays to understand your credit scores and to make them as strong as possible.
Article by: Gerri Detweiler Credit.com