FICO Score Range: Understanding the FICO Score System
If you are having trouble understanding the FICO Score Range or are even having trouble finding information about the FICO Score Range, you are not alone. The FICO Score Range, and their system for that matter, is not easy to understand and there is not a lot of information published about it. So here at CreditScoreScaleGuide.com we are going to share with you some of the nuggets of information that we have found to help you understand the FICO Scor Range a little better than most.
FICO scores are calculated from a myriad of inputs. The FICO Score range takes into account your length of credit history, how much you owe on your current lines of credit, your payment history, any new credit that you have established and what type of credit lines make up your current credit accounts. All of these factors are inputs into your FICO Score. The current FICO score range is from 300-850.
All lenders use the FICO score range when determining your credit worthiness. Equifax, Transunion and Experian all calculate their scores a bit differently but they all use the same three digit FICO score range when computing your final score. The FICO score is essentially a rating that tells lenders how likely you are to pay back your debt to them. The higher your FICO score, the more likely you are to pay the lender back.
FICO Score Range: What Your Credit Score Means to You
This a rough estimate of the the meanings of the different scores within the FICO score range and note that these can fluctuate as trends within the lending world change:
- Below 585: Very High Risk, probably will not qualify for loans or lines of credit
- 591-619: High Risk, may not qualify for loans or lines of credit
- 620-679: Moderate Risk, lender will look at details of your credit report to determine feasibility of extending credit
- 680-718: Considered to be good credit
- Above 719: Considered to be excellent credit
FICO Score Range: Factors that can Negatively Impact Your FICO Score
In order to optimize your FICO credit score, you need to take the following into account:
- You CANNOT be delinquent in your credit or loan accounts. The length of delinquency and amount of delinquency weigh heavily on your FICO score and will lower it within the FICO score range.
- DO NOT max out your credit. Don’t even use over 50% of your available credit for any one credit card or loan. I try to keep my credit use to less than 33% of what is available for any one credit card or loan. You do not want to over extend yourself and using too much of your available credit can do that. The credit agencies frown upon this and will knock you for using too much of your available credit.
- Keep your credit cards open. Having a long line of credit history will bump you up in the FICO score range. Showing that you have a long credit history and that you have used that credit responsibly over time is a big bonus when computing your credit score. Be sure to leave your accounts open, even if you do not use them. This establishes credit history and shows that you do not abuse the lines of credit that you do have.
- Don’t go on a credit seeking binge. Yes, if you secured five new lines of credit and then go try to obtain a loan for a new car, it can be frowned upon. Opening a lot of accounts, in a short amount of time, believe it or not,can lower your score in the FICO score range.