The Basics to Understanding your Credit Score pt2

July 10, 2008 at 1:18 pm | Credit Information, Credit Repair | No comment

Credit Scores are Vital to your Financial Health

A credit score is a number that helps lenders and others predict how likely you are to make your credit payments on time. Each score is based on the information in your credit report.

Credit scores affect whether you can get credit and what you pay for credit cards, auto loans, mortgages and other kinds of credit. For most kinds of credit scores, a higher score means you are more likely to be approved and pay a lower interest rate on new credit.

Want to rent an apartment?

Without good scores, your apartment application may be turned down by the landlord. Your scores also may determine how big a deposit you will have to pay for telephone, electricity or natural gas service.

Lenders look at your scores all the time. They look at your scores when deciding, for example, whether to change your interest rate or credit limit on a credit card, or whether to send you an offer through the mail. Having good credit scores makes your financial dealings a lot easier and can save you money in lower interest rates. That’s why they are a vital part of your financial health.

Here is a break down of the © FICO Scoring System!

720 and Above
Excellent Credit! If you have a score of 720 or above lots of credit is available to you at a low interest rate.
680 – 719
Good Credit! When you have a score between 680-719 lots of credit is available to you at a reasonable interest rate.
620 – 679
Average Credit! Credit is available for you, but the interest rates are going up.
586 – 619
Weak Credit! Credit is still available to you, but the interest rates are very high.
585 and Below
Bad Credit! Credit may not be available to you at this level. If you can get approved for credit, you will be looking at extremely high interest rates.

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