Understanding Your Credit Rating

There seems to be a large amount of confusion about credit scores. There are 3 main firms that calculate your credit score. They do not reveal the actual formulas that they use to come up with a score. What you do have to know is the range of the scores and how good your credit is considered in those ranges. Here I am going to show you how to do a credit score research on your own.

The Top Scores

An 850 is the highest credit score you may have. Few folk get to this top number. The sometimes accepted range for excellent credit is between 750 and 850. If your score is within these numbers you could have no issues getting a loan and a great rate of interest. From 700 to 750 is still considered very good credit. Loans may be very easy to come by at really competitive IRs.

The Middle Scores

Between 600 and 700 is average. The closer you get to 600 the more hard it's going to be. You'll be paying considerably more in interest and you could be turned down occasionally. You will also require a cosigner in a few cases. If you've done a credit report analysis and found yourself in this range look at it this way, you are not too far from where you must be.

The Bottom Scores

Anything under 600 and all the way down 300 is thought to be bad. The 500s seemed to be where many folks struggle. At this range you are not completely out but it will take a little time to spin things around. If you get approved for a loan it will likely be at extremely high rates. I'd consider pushing towards raising my credit report first. Anything below 500 is terrible. I've barely seen scores in the 300 and 400 range. This is usually an indication of multiple repossessions, repos, accounts in collections, and other numerous negative items.

Keep in mind that irrespective of how bad your credit is you can work towards enhancing it. This isn't an overnight process and depending on how low your score is it may need months or maybe years. If you have done a credit report research and found that you're not where you need to be, do something positive about it. There’s not much worse than being in the very same position you're now years down the road.

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