Credit Score Range

Whether you’re applying for credit such as car loans, mortgages, or credit cards, it will always be a good practice to first check where you stand on the credit score scale. Because where you are on the scale can have a huge effect on the interest rates you’ll get.

The average credit score nationwide is rated at 666. If your score is above this range, then you’re among the 30% of the American consumers who are more likely to be approved for credit. Otherwise, take a second look at your history and analyze what needs to be done.

A good credit rating gives you access to a range of opportunities for financial assistance. Lenders are most likely to warm up to a credit score that does not fall below the threshold.

Unfortunately, those in the bottom part of the percentile are considered high risk and may face limited access to financial aid. Another sad part is, whatever options they have,  they may pay a hefty price to borrow. This is what awaits 40% of American consumers.

But all is not lost because like an ailing human body, a credit rating can be healed and pumped back into shape. In understanding where you stand on credit score range, the right actions can be taken to improve your credit score. Here is what you need to know:

1. Poor credit

Typically between the 400 and 500 range, this rating is a result of three things: one, you are on the initial steps towards building credit; two, default payments on mortgages; and three, you underwent bankruptcy. Take out a secured credit card. Although the fees are higher, it is an indirectly way of sending messages to financing institutions that you are credit worthy.

2. Fair credit

Between mid 500 and 600 range. Financing agencies are willing to take a risk on you but only up to a certain level. It’s time to start paying attention to your budgeting and finances. Just set with the pace but at the same time, deal with your debts. If you focus on them, this could budge your rating upwards.

3. Good credit

Better than the bottom two scales, this is between the mid 600s and 720 range. More opportunities and but still often not good enough for some mortgage lenders. Put some diversity into your credit-worthiness such as taking out loans and using different credit types. This is to exhibit your ability to juggle your credit.

4. Excellent credit

Ranging above 720, this score is a challenge to maintain as it is to attain. Once you reach this point, you should still keep up with your common credit practices but inject fresh credit options for diversification.

Good credit score management starts from knowing your limits and working your way around them. Also, set your priorities and see how all these fit into your ultimate goal of increasing your credit rating.