Here’s Everything You Need to Know About Credit Score Ranges

Credit Score Ranges

What is it about scoring that brings out the perfectionist in all of us? It seems like the minute we know we’re officially judged on something, we suddenly care more than we would have before.

Enter credit scores.

Credit scores are important – vitally important. But the way some people strive for excellence on their scores can get in the way of their financial goals.

The good news is, you can give up that goal. While there is such thing as a perfect credit score, we all have multiple credit scores. And scoring perfectly on each and every type of score is unattainable. That’s why the only thing you should focus on are your credit score ranges.

Don’t know what I’m talking about? Read on.

What are credit score ranges?

Before we get too far into ranges, here’s some basic credit score information you should know:

  • Everyone has more than one credit score
  • Your credit scores are constantly changing
  • There are two leading credit score models: FICO and VantageScore

With that out of the way, let’s look at the details. Your credit scores will vary based on the model being used to calculate your score. And the number you get will fall into one of five ranges. Here’s the breakdown of FICO credit score ranges:

  • Exceptional: 800+
  • Very good: 740-799
  • Good: 670-739
  • Fair: 580-669
  • Poor: 579 and below

And here’s the breakdown of VantageScore credit score ranges:

  • Super prime: 781-850
  • Prime: 661-780
  • Near prime: 601-660
  • Subprime: 500-600
  • Deep subprime: 300-499

Everyone has more than one credit score, so it’s entirely possible that you could fall into one range based on one credit score and another range based on a different credit score. This could even happen within the same credit scoring model since there are many versions of each. It’s even more likely if you’re close to the top or bottom of one particular range.

Regardless of the fact that you could land in more than one range among all your scores, it’s still important to get an idea of where you stand on the credit rating scale. Here’s how to find out.

How to know where you stand on the credit rating scale

It’s easier than ever before to get your credit score and understand where you fall on a credit score chart.

To start, if you have an account with a large national bank, there’s a good chance they’re already making your credit score available to you. The same goes with national credit card companies. Just log in to your account on their website to see if you have access to this information.

If your bank or credit card company haven’t made your score available, there are plenty of other places you can get your free credit score. But there’s one place you can’t get your free credit score: from your credit report.

As similar as these two things sound, they are not the same. While it’s important to check your credit reports each year (one from each of the three credit reporting agencies – all free annually at annualcreditreport.com), these reports won’t list your credit score.

Where you can check your credit score for free

There are new websites offering free credit scores all the time. Here’s a list of a few popular ones to get you started:

A word of caution

When you do check your score, keep in mind the score you see will very likely not be the same score lenders see.

Each lender uses a different version of their selected credit scoring model based on their needs. And some of the free services give you what’s called an “educational score.” That means they’re showing you a score to see where you stand, but you can’t count on it being the same score lenders are seeing.

While an educational credit score is helpful, it’s just another reminder that there is a myriad of scores out there for each of us. All the more reason to stay focused on the range, not on the three digit number.

While your range might vary as well, it’s a much easier way to get a general view of where you stand.

How to move up on the credit score chart

Where you stand on the credit rating scale can have a massive impact on your financial life. It will affect the interest rate you get on new credit. It could determine the amount you pay on insurance premiums. And it might even influence your employment opportunities.

If your credit score ranges aren’t as high as you’d like them to be, then it’s time to strategize a way to move on up the credit score chart. But before you can create your strategy, you first need to understand how credit scores work. And that will depend on the factors used to determine your scores.

FICO credit score factors

There are five main factors that FICO uses to calculate your credit score. These factors are not all weighted evenly, something you should keep in mind when we move on to the step of improving your credit.

  • Payment history
  • Amount of debt
  • Length of credit history
  • New credit
  • Credit mix
credit score chart

Image credit: myfico.com

VantageScore credit score factors

The factors that VantageScore uses to calculate your credit score don’t vary all that much from the factors FICO uses. Here’s how VantageScore defines their factors:

  • Payment history
  • Age and type of credit
  • Percentage of credit limit used
  • Total balances/debt
  • Recent credit behavior and inquiries
  • Available credit
credit rating scale

Image credit: your.vantagescore.com

How to improve your score and improve your credit score ranges

When comparing the list of factors that influence your credit score from FICO and VantageScore, you should see some overlap. That means you don’t have to spin your wheels to improve your credit score and thus your credit score ranges.

Here are a few best practices you can follow to move up on the credit score chart.

  1. Make all of your payments on time
  2. Decrease your debt
  3. Increase your credit limit – without using any of it
  4. Start and maintain long relationships with one or two financial institutions
  5. Rate shop responsibly
  6. Use credit when you need it but never go delinquent and never max out credit lines
  7. Dispute any errors you find on your credit report

While the list looks long, the explanation and practices are simple. Payment history is the most important factor for FICO and VantageScore credit scores. Therefore you get a straightforward win by just making sure to pay all of your bills on time.

As for debt amounts and credit limits, you can improve your credit score by widening the gap between the two. The closer your debt is to the maximum amount available to you, the worse your score will be. Work to pay off your debt and, if you need an extra boost, apply to increase your credit limit. That will widen the gap even more as long as you don’t use any of the new credit.

The next factor – applying for credit – is far less influential on your score, but it’s one that worries many consumers. As long as you rate shop responsibly then this shouldn’t be a concern. Only apply for one type of loan at the same time, only for the amount you need, and always within a short time frame such as 14 days. Credit-scoring bureaus will then batch your requests, so your score doesn’t get hit more than once.

Finally, make sure you’re checking your credit report from each of the credit reporting bureaus each year. If there’s an error on your report, it will affect your credit score and thus your credit score range. If you do happen to find an error, dispute it with the credit reporting bureau.

Why you should care about your credit score ranges

If this seems like a lot of work for nothing, think again. As mentioned above, your credit score ranges can have a massive impact on your financial life. And I don’t just mean when you want to use credit.

First of all, employers and prospective employers can check your credit score. That means falling into a low range could cost you employment opportunities.

Insurance companies can check your credit score. That means you could pay higher premiums for having a low score.

Finally, lenders can check your credit score. And that means either being denied for credit if your score is too low or being approved but at a much higher interest rate.

Like it or not, your credit score ranges have a huge effect on your finances. And you can’t just avoid the effects by avoiding credit.

If you pay late on a rental unit, your landlord can report that to the credit reporting agencies. The same goes for utility bills, medical costs, and just about any other kind of bill you can get. These delinquencies can show up on your credit report as early as 30 days late. And they will significantly impact your credit scores.

It’s also important to note that your income doesn’t affect your credit score. Credit reporting agencies aren’t concerned with how much money you earn as much as they are concerned with how you handle your financial obligations. Handling them poorly can cost you a lot more than just lost credit opportunities.

Just like setting up automatic payments or maintaining a budget, monitoring your credit should become a part of your finance routine.

Don’t get hung up on the number

With all that said, don’t get sucked into caring so much about your number that you make decisions that are bad for your finances. What kind of decisions might those be? Here are just a few examples of what not to do:

  • Avoiding applying for credit when you need it because you fear taking a hit on your score
  • Applying for types of credit you have no use for to improve your credit mix
  • Thinking you have to carry a balance on your credit card to improve your score (you don’t)

These are just a few of the things people might do to try to improve their credit score, but they aren’t something you should try. And at the end of the day, using credit responsibly and diligently paying all of your financial accounts on time will help you build good credit.

Any time you see advice telling you to do something for your credit that can get you into financial trouble, understand that is bad advice. And don’t make decisions just to get the highest number possible. Remember, you have more than one score anyway.

Instead, practice responsible borrowing and stay focused on your credit score ranges. That way you can keep track of where you stand without becoming blinded by a desire for perfection.

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1 Includes AutoPay discount. Important Disclosures for SoFi.

SoFi Disclosures

  1. Terms and Conditions Apply: SOFI RESERVES THE RIGHT TO MODIFY OR DISCONTINUE PRODUCTS AND BENEFITS AT ANY TIME WITHOUT NOTICE. To qualify, a borrower must be a U.S. citizen or permanent resident in an eligible state and meet SoFi’s underwriting requirements. Not all borrowers receive the lowest rate. To qualify for the lowest rate, you must have a responsible financial history and meet other conditions. If approved, your actual rate will be within the range of rates listed above and will depend on a variety of factors, including term of loan, a responsible financial history, years of experience, income and other factors. Rates and Terms are subject to change at anytime without notice and are subject to state restrictions. SoFi refinance loans are private loans and do not have the same repayment options that the federal loan program offers such as Income Based Repayment or Income Contingent Repayment or PAYE. Licensed by the Department of Business Oversight under the California Finance Lender Law License No. 6054612. SoFi loans are originated by SoFi Lending Corp., NMLS # 1121636. (www.nmlsconsumeraccess.org)
  2. Personal Loans: Fixed rates from 5.49% APR to 14.24% APR (with AutoPay). Variable rates from 5.29% APR to 11.44% APR (with AutoPay). SoFi rate ranges are current as of December 1, 2017 and are subject to change without notice. Not all rates and amounts available in all states. See Personal Loan eligibility details. Not all applicants qualify for the lowest rate. If approved for a loan, to qualify for the lowest rate, you must have a responsible financial history and meet other conditions. Your actual rate will be within the range of rates listed above and will depend on a variety of factors, including evaluation of your credit worthiness, years of professional experience, income and other factors. Interest rates on variable rate loans are capped at 14.95%. Lowest variable rate of 5.29% APR assumes current 1-month LIBOR rate of 1.34% plus 4.20% margin minus 0.25% AutoPay discount. For the SoFi variable rate loan, the 1-month LIBOR index will adjust monthly and the loan payment will be re-amortized and may change monthly. APRs for variable rate loans may increase after origination if the LIBOR index increases. The SoFi 0.25% AutoPay interest rate reduction requires you to agree to make monthly principal and interest payments by an automatic monthly deduction from a savings or checking account. The benefit will discontinue and be lost for periods in which you do not pay by automatic deduction from a savings or checking account.

2 Important Disclosures for Citizens Bank.

Citizens Bank Disclosures

  1. Personal Loan Rate Disclosure: Variable rate, based on the one-month London Interbank Offered Rate (“LIBOR”) published in The Wall Street Journal on the twenty-fifth day, or the next business day, of the preceding calendar month. As of August 1, 2017, the one-month LIBOR rate is 1.23%. Variable interest rates range from 6.02% – 15.97% (6.02% – 15.97% APR) and will fluctuate over the term of your loan with changes in the LIBOR rate, and will vary based on applicable terms and presence of a co-applicant. Fixed interest rates range from 5.99% – 16.24% (5.99% – 16.24% APR) based on applicable terms and presence of a co-applicant. Lowest rates shown are for eligible applicants, require a 3-year repayment term, and include our Loyalty and Automatic Payment discounts of 0.25 percentage points each, as outlined in the Loyalty Discount and Automatic Payment Discount disclosures. Subject to additional terms and conditions, and rates are subject to change at any time without notice. Such changes will only apply to applications taken after the effective date of change.
  2. Loyalty Discount: The borrower will be eligible for a 0.25 percentage point interest rate reduction on their loan if the borrower has a qualifying account in existence with Citizens Bank at the time the borrower has submitted a completed application authorizing us to review their credit request for the loan. The following are qualifying accounts: any checking account, savings account, money market account, certificate of deposit, automobile loan, home equity loan, home equity line of credit, mortgage, credit card account, student loans or other personal loans owned by Citizens Bank, N.A. Please note, Citizens Bank checking and savings account options are only available in the following states: CT, DE, MA, MI, NH, NJ, NY, OH, PA, RI and VT. This discount will be reflected in the interest rate and Annual Percentage Rate (APR) disclosed in the Truth-In-Lending Disclosure that will be provided to the borrower once the loan is approved. Limit of one Loyalty Discount per loan, and discount will not be applied to prior loans. The Loyalty Discount will remain in effect for the life of the loan.
  3. Automatic Payment Benefit: Borrowers will be eligible to receive a 0.25 percentage point interest rate reduction on their student loans owned by Citizens Bank, N.A. during such time as payments are required to be made and our loan servicer is authorized to automatically deduct payments each month from any bank account the borrower designates. Discount is not available when payments are not due, such as during forbearance. If our loan servicer is unable to successfully withdraw the automatic deductions from the designated account three or more times within any 12-month period, the borrower will no longer be eligible for this discount.
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