Sizing Up the Credit Score Scale

Singing pirates aside, you should always keep an eye on your credit report, which you can see once a year from one of the three credit reporting agencies for free per American law. Some states will let you see it as often as you want, still free. This only helps, however, if you understand what the credit score scale means.

The scale begins between 300 and 350, depending on the product. Anything from there to 600 is considered bad. A credit score this low will make it almost impossible to get any sort of loan.

Getting a loan is possible with a credit score between 600 and 640, but your interest rates will probably be higher than you would like. Interest rates will likely be decent with a score of 641 to 680. From here to 720 is considered good, and you should be able to get a loan with ease. The higher the score, the lower your interest rates should be.

The goal is 760 or higher. You can get the best possible rates and do anything with this score. The highest rate on the credit score scale is 850.

This number is designed to show how well you have managed your debt in the past and, therefore, how likely you are to repay a loan or make payments on owed credit in the future. This is why a low credit score will make it difficult to get loans. If your score is low, there are ways to improve it, including paying off your credit cards, check your credit card limits, use an old card, and check your reports regularly to catch any mistakes before they make a significant dent in your credit score.

These scores do not appear simply by magic. They are made by looking at your payment history on prior credit, how much credit you have available and in use, how long you have been using credit, and the type of debt you are using. Besides just the credit scores, lenders will look at your current income and some other factors while considering your applications for credit.

Your credit score is something you need to keep an eye on. If you do not take care of it, you will not be able to use it for your purposes when the time comes. By keeping up with payments and using credit wisely, you can protect your credit score for the future.


Note: Individual credit score factors can identify specific negative impacts on your credit scores.

Kari Johnson

Kari Johnson is a first-year student at the University of North Carolina at Chapel Hill, having lived in North Carolina her whole life. At UNC, she is a declared Religious Studies major, and intends to study some form of writing as well during her time and Chapel Hill. She plans to graduate in 2014, after participating in undergraduate research and a study abroad program.

Kari discovered the magic of writing early, in elementary school, and has devoted every spare moment to it since. She writes fiction for her own amusement, and recently began writing articles for The Daily Tar Heel in Chapel Hill. Besides writing, she loves spending time with friends and family, reading, and drinking coffee. She defines herself based on her faith in God, her family roots, and her dream of one day publishing a best-selling novel.

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