- Your credit score is a three-digit number that represents your creditworthiness.
- A high credit score indicates that you’re low risk and likely to pay back any debts you incur.
- The majority of lenders use FICO scores.
- You can often obtain free credit scores from a variety of sources, including your credit card issuer, your bank and websites that offer free educational scores.
Credit score ranges can get a little confusing. One of the reasons is that you have many different credit scores. This makes it difficult, but not impossible, to determine what credit range you fall into. Knowing your credit status starts with finding out your credit score.
I’m going to pull back the curtain so you can get an unblocked 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 usually requests your credit score from each of the three credit reporting bureaus: Equifax, Experian and TransUnion. Credit scores are calculated based on the contents of your credit files at each bureau. Sometimes, creditors report your payment history to only one or two bureaus. This can result in different credit scores from different bureaus.
As if that weren’t confusing enough, there are also different versions of scores. The most commonly used credit scores are FICO and VantageScore, which range from 300 to 850, but there are many versions of these credit scores as well. Even though the score algorithms for FICO and VantageScore look at similar factors, they weigh them differently. This means you can’t 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 760 FICO score, which is in the very good range, that tells the lender you’re likely to repay a loan or credit card debt.
Another difference between FICO and VantageScore is the length of time it takes to generate a credit score. VantageScore favors those who are new to credit because you can generate a score after you’ve had credit for at least a month. With FICO, it takes around six months of reported payment history to the bureaus before you have a credit score.
What Affects Your Credit Score?
While both FICO and VantageScore are based on data in 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%.
- Amounts owed: 30%.
- Length of credit history: 15%.
- Credit mix: 10%.
- New credit: 10%.
VantageScore looks at a variety of factors and weighs them based on how influential they are to your score. Here are the key areas that impact your VantageScore:
- Payment history: extremely influential.
- Age and type of credit: highly influential.
- Percent of credit limit used: highly influential.
- Total balances and debt: moderately influential.
- Recent credit behavior: less influential.
- Available credit: less influential.
What Are the Credit Score Ranges?
Credit decisions are made based on numerous factors, not just on 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 instance, if you want a rewards credit card that requires excellent credit but you only have fair credit, you’ll know that you should improve your score before applying.
- Exceptional: 800 and above.
- Very good: 740-799.
- Good: 670-739.
- Fair: 580-669.
- Poor: 579 and lower.
As I’ve already mentioned, even though VantageScore has the same numerical ranges as a FICO score, they can’t be compared head-to-head.
- Excellent: 781-850.
- Good: 661-780.
- Fair: 601-660.
- Poor: 500-600.
- Very poor: 300-499.
You can see how the credit ranges differ by looking at fair credit, for example. If you have a 600 FICO score, you fall into the fair credit score range. But a 600 VantageScore is considered a poor score. The credit ranges have some overlap, but there are also differences when you try to determine your credit status.
Basically, just know which score you’re trying to interpret. 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 see your credit score. Most major credit card issuers offer a free credit score along with your monthly statement. Some offer them whenever you want to see what your credit score is.
There are also multiple websites that offer free educational credit scores. These are usually a VantageScore, but that has value as well.
You can also pay for your FICO score at myFICO.com. Be careful that you don’t accidentally sign up for a credit monitoring service, or you’ll end up paying a monthly fee.
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.
How to Monitor Your Credit
Aside from understanding where you stand within 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 reporting bureaus at AnnualCreditReport.com. Note that your credit report won’t 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 you can improve your credit score. It also helps you uncover fraud. For instance, if you see a credit account you didn’t open, you need to report the fraudulent account to the credit bureaus immediately.