Credit Score Scale

This Credit Score Scale explains what your actual score means and helps you make sense of how it will effect your life. If you read enough articles about the scale you will become thoroughly confused about what the numbers really mean. The reason for this is that there are no rules that carry over between all financial institutions as to what constitutes a good credit score. There are close similarities, and we can use that to get an estimated idea of where you stand.


Most sources say that the scale ranges from 350 to 850.


Less than 600 is bad, and you will have a very hard time getting any kind of loan.


600-640: You will be able to do things with this, but you will have very high interest rates.


641-680: This is ok. Not the best, but far from the worst and you will be able to get decent interest rates on loans, but still not entirely desirable.


681-720: This is good. You will always be able to get loans easily, and the higher end of this has a good chance of low interest rates.


720 and up: This is the credit score goal! You should be getting the best possible rates and be able to do anything you want with your credit.

If you’re low on this list, don’t despair, you can build these numbers up!


Where does my credit score come from?

Three major credit reporting agencies take down information from creditors about your financial activities. This information is gathered into reports which you can obtain once a year for free. These reports contain information like late payments, length of your history, the types of credit used among other things. When you apply for things than include a credit check, such as loans or rent applications, your report is taken by a financial institution and used to create a credit score. They then consider this number, deciding whether the number means you are likely to make timely payments and be a desireable customer. You can judge what they’ll likely think of your situation using the scale above.


Hopefully this information will help you decide where you need to be and if you need to work on improving your credit report. Remember that all financial institutions do judge these numbers independently, but you can use this credit score scale explained above as a general guide to get you where you want to be.

Establishing Yourself on the Credit Score Range

Establishing yourself on the credit score range can be even more difficult than improving from a bad place, and even more important. When you have no real history to speak of, companies will look at that and see you as a wild card, which can be worse than having a bad rating. This will make things more difficult for you, and expensive. But if companies are so leery of you, how do you go about building up a history? This is where the difficulty lies, but things are not impossible. There are things set up specifically for doing this, of course, because everyone has had to establish themselves on the credit score range at some point in their lives.

good-credit

So how do they do it, and why does it even matter what your rating is, anyhow? This comes up for you in so many ways that it’s impossible to get around it. Your rating is looked at when you go to apply for loans or cards of course, but also any kind of insurance, rentals, and even well paying jobs. It doesn’t just affect whether you’ll get approved for these things, either—it also effects what kind of rates you’ll be offered. If you have a good rating, you’ll be able to pay better lower interest rates on all of these things, like loans, cards, and insurance. That saves you money and overall makes your life easier.

Now, how do you go about establishing yourself on the credit score range. You do NOT go out and sign up for any accounts that will take you and rack up charges. You want to be responsible and careful with your actions so that you establish a good rating right from the beginning and don’t have to worry about trying to improve from a bad place, later, because that is very difficult. So, the first thing you do, is make sure you have a budget set up so that you know all about your actual finances and what is coming in and going out each month.

The easiest and most straightforward thing you can do now is get a secured credit card from the bank to establish yourself on the credit score range. These types of accounts are meant specifically for people trying to build up some new history, and are a great way to get started. You can get them from your local bank. You’ll need to have some money that will go into a savings account and be used as collateral while you have the account. This will also set your limit on your card. Make sure before you sign up that you have the option to switch to an unsecured card after twelve to eighteen months of on time payments. For the best results for your rating, you want to use under thirty percent of your limit each month, and always pay it off at the end of the month. This is best for building up a good history. Also, before signing up for the account, make sure that they report to the three major credit agencies, or you’re not doing yourself any good.

With this straight forward plan you can go about establishing yourself on the credit score range, and get yourself set up for a good looking place on the scale for years to come.

How to Maintain a High Credit Score

The internet is chock full of information on how to improve your rating, and that’s all good and great, but once you’ve gotten yourself up there, how do you maintain a high credit score? There is a lot to know about what makes up a rating, how the range works, what to do to get to a good place, and what a good rating even is.

First let’s take a look at the credit score scale and see what a high rating would be. Truly, anything over six hundred and eighty is going to be considered great for most things, but a truly high rating is going to be over seven hundred, with seven hundred and thirty being pretty much pristine.

Once you’ve reached such great heights, it is inevitable that at certain points in your life you will dip below these magical lines, but keeping that dip to being a momentary situation, and making sure it doesn’t go too far down, does take some financial know how. The first thing to understand is that your rating is made up of weighted information from across your report. Things like the age of your history, the amount of credit available to you versus how much you’re using, late and missed payments, and the variety of payments you are making are all things that are going to effect maintaining your high credit score. But it’s one thing to look at the facts on a report that make up your rating, it’s another to look at what it is you’re actually doing to get there.

In terms of the age of your history, if you have any cards that are older than others, it’s good to keep those accounts open and active. This doesn’t mean that you have to rack up charges, in fact quite the opposite is what you want to do to maintain a high credit score. You want to use your cards very lightly. It is recommended that you only use under thirty percent of the limit and you pay that off at the end of every month. This keeps things active, but keeps you from racking up debt.

This is also good for another factor that helps you keep your rating looking good—the amount of credit available to you put against the amount you are using. The less you are using, and the more available to you, the better off you look. This shows that you are in control of your finances and aren’t just borrowing every chance you get, and is a small thing that gives a good boost to your number.

Making any kind of late payments is really going to drag you down and is probably the worst thing you can do to your high rating, except having missed payments altogether—this would definitely be worse. Making sure that you have a budget laid out and are keeping on top of any and all payments is the number one thing you need to do to maintain a high credit score, and is in fact so important, that in most articles this is the only thing people will you to do because it’s so important to just focus on not missing payments. This sets you back on your rating, and takes a lot of time to rebuild from. Remember, above all else, never miss a payment.

If you have a good amount of loan history, or card history, but not a lot of the other then something you can do to give yourself a bit of a boost is build some more payment history in the area you are lacking. Your score is made up of a history with both of these types of payments, and the people with the best scores are going to have both. Don’t do this at a time when you want to use your high credit score to do something soon though as your rating will take a dip right when you sign up for something new. This dip is temporary, and the payments over time will make you look even better than before, but is definitely something to be aware of when you are trying to keep yourself looking good financially.

This may seem like a lot to take in, but if you break it down they’re really just small things to keep in mind when handling your finances so that you can maintain a high credit score and are much better than ever having to worry about improving it down the road. Be careful with your finances, stick to a budget, always make your payments on time, and you should be able to avoid any major dips on your rating.

6 Things To Keep Your Credit Score High

It’s inevitable that over your life your place on the credit score scale will fluctuate a bit. You will apply for a new loan and your score will take a slight temporary dip, and then you’ll pay it off and make a slight jump up above where you were. This is how life goes. Your score isn’t going to stay stagnate because time is a major factor that effects all scores, and as time goes by your history changes, which means your score changes in turn. That is an okay thing and isn’t something to worry about, you just need to try and maintain that same range wherever possible! That’s why there are these six simple tips for maintaining a healthy credit score range for life.

High Credit Score Scale Maintenance

An emergency savings fund is an essential thing to have. This doesn’t need to be thousands of dollars. A great start is a fund of about fifteen hundred dollars. This money can be used when unexpected financial emergencies come up such as a vet bill, your car gets towed, or any of the other unexpected events that come up in life. This way you’ll have the money and not need to borrow to cover these small sudden events.

Having a budget means that you know what money is coming in every month and what money is going out. You need to have a budget if you’re going to be in control of your finances.

It is paramount that you pay every bill on time, every time. Having a budget should help you with this.

You should use credit cards, but use them lightly. This helps build up a payment history and keeps you financial active, but by using under a third of the limit at any given time you are keeping your debt amount low, which is what you want if you’re going to be in a good credit score range.

Which brings us to keeping your debt amount low. Don’t borrow money unless it’s essential for your life, and when you do, make sure that you are paying attention to how much you are really borrowing, and of course, that it fits in with your budget and you will be paying it off as soon as you can.

And then, of course, there is checking your credit report regularly. You can do this for free online once a year so there is no reason not to do this. You can look it over for mistakes, make sure that no one has stolen your identity (which is a very common problem and can ruin your credit score completely), and get a real feel for where it is you stand. This is also when you can evaluate everything you have been doing financially since it’s all laid out for you on your credit history and see if it really feels like what you are doing is helping you maintain your high credit score.

How a Secured CD Loan Can Help Rebuild Your Credit Rating

There are a lot of different things you can do to rebuild your credit rating, and a complete plan should really include multiple parts. A secured CD loan is an option that often gets overlooked but can do a lot for people to improve their credit rating over time, and is a fairly low cost and straight forward option that is really meant exactly for this situation.

When you go to get other financing if you don’t have a good credit score range secured you are going to have a hard time getting approval for financing. One of the best things about using a certificate of deposit as collateral is that it’s something you can easily go out and get, and when you are getting it with a loan in mind you can talk to your lender about that right from the beginning and get things rolling quickly and smoothly without worrying so much about finding a company that will approve your application despite your credit history. This kind of deal is meant for rebuilding your credit history.

To have a high credit score you really want to have a payment history with revolving payments (like credit cards) and installment payments (like loans). This lets you fill in an area that may be otherwise slim, and prove that you can make payments on time. This will make it easier for companies to trust you in the future.

Not only do these deals usually have very low interest rates for you to pay because they are secured financing, but you will also earn interest on the certificate of deposit itself. That makes this your lowest cost option out there. Now, of course, this isn’t a great option if you are actually looking for funding for something, because you’ll need to have the cash to buy a CD in the first place, but it is a great option if all you want to do is build up some on time payment history.

Because this is something you may not have heard of it’s easy to conclude that it will be hard to find a lender that does this, but once you start looking into it you will probably be surprised to see how common it really is. There are lots of lenders out there that do this kind of deal, and it is likely that the bank or credit union you are currently a customer at will probably offer something like for you. Remember to shop around so that you can find the best deal that will work for you, and get the best rate on your CD itself.

How High Has Your Credit Score Ever Been?

Have you ever had a rating over eight hundred? Have you ever had a rating over seven hundred? Do you know what these numbers really mean in terms of the credit score scale? Many people don’t really have a clue, and when they hear numbers like seven hundred, they believe it’s out of a thousand points total and that their rating isn’t all that great at seven hundred. This is not correct, however. The scale actually ranges from about three hundred and fifty to eight hundred and fifty. That said, it is extremely rare to have a rating as high as eight hundred. If you have ever had a rating that high, you should be extremely proud and happy! Sadly, over your life, it is likely you will not be able to stay quite that high. When things come up, you get a mortgage or a car loan, the amount of debt you have grows, and your rating is likely to dip. However, from eight hundred, you have a long way to dip and still be in a good rating zone!

So what is a minimum rating to have and still be in a good place on the credit score scale? It depends on what you are looking to do. If you are going to apply for mortgages it would be ideal to be anywhere over seven hundred and thirty. That is a great place to be even if you are looking for a home loan, which is probably the point in your life where you want to have the best rating possible. In terms of how long can you go, it depends on what company, but arguably you wouldn’t want to be under six hundred and eighty if you still wanted to have a good rating.

If you do have a rating of six hundred and eighty, great for you! That is a good place on the credit scale! However, it might be worth it to try and get yourself a bit higher. Not because this is a bad rating of course, but because as I mentioned earlier in this article, your rating will inevitably take dips over the course of your life. Because of this, it pays off to have a rating that can afford to take a slight drop, so getting yourself over that seven hundred mark is worth it in the long run.

So, how high has your credit score ever been? Have you passed the rare eight hundred mark? How has it effected your life?

Why Fixing Your Bad Credit Is Worth It

If you’ve lived with a bad credit score for long enough, you start to just accept the effects it has on your life as just part of life. You accept that it is difficult to get loans, credit cards, and that a mortgage is something you just won’t be seeing in the forseeable future. You get used to paying high interest rates, and avoiding applying for any kind of account because you don’t want to deal with rejection until you find a company willing to do business with you. This just becomes how things are, and there is nothing to do about it. The issue, however, is that this is not how your life has to be at all. With small adjustments to how you handle your finances, your life could be much easier! You’ll save money, and open up a wide range of possibilities for your life. The impact your finances has on the quality of your life should not be undervalued.

When you have a good credit score you can apply for any type of account and as long as you have the income to support it, you should be approved. If you are in the best credit range you will even be offered the lowest interest rates the company has to offer, in order to attract your business. Your good credit score indicates to them that you have a history of making payments on time, and that’s the type of customer they want to have. This is true for all sorts of accounts, from your car insurance, to credit cards, to loans, to a mortgage and it will all save you a lot of money over the course of your life.

Fixing your credit score in order to make your life easier, and cheaper, may still seem like a lot of effort – but it doesn’t have to be. You can make small changes in your daily life with how you handle your finances and over time things will improve greatly. Making sure you have a budget and can afford to make all payments you sign up for and have a payment schedule set up so you always pay things on time is a good place to start. Making sure that you check your credit report at least once a year to check for mistakes and see where you stand is an easy and necessary step. Do what you can to build up a history of on time payments on a variety of accounts. Getting a secured credit card, and using it carefully, is a great way to build up a payment history. To be in a good place on the credit score scale you need to have a history of on time payments on a variety of accounts, like loans and credit cards. Using collateral to open up secured versions of either of these types of accounts will get you a lower interest rate and make getting approval a much easier process while you are rebuilding your history.

Of course it’s not enough to rebuild, you also need to do what you can to repair old negative marks. Pick one at a time and slowly work on doing what you can if it overwhelms you. If you have an old late payment, try writing a good faith adjustment letter. If you have a debt problem, look over your budget and figure out what you can do to work on paying that down. Even a small payment will help repair the debt, and rebuild your payment history.

Making these small adjustments in your life to rebuild some history and repair old marks is a great way to slowly fix your credit score and greatly improve your financial life. The money you will save, and the headaches you will save yourself from, will be well worth the little effort it will take.

What Happens to Your Credit Score After Bankruptcy

Your credit score is going to take an inevitable drop after bankruptcy. A bankruptcy is the blackest mark you can possibly have on your credit report. Plus, you likely did a lot of damage to your history in the time leading up the point where you finally decided to file and take control of your debt. With that said, you have made an important move handling your debt, and while you have this black mark on your report that will not age off for ten years, you can greatly improve your rating much, much sooner than that. In fact, in as little as two years you could have a decent rating again—if you are willing to put in the work to make that happen, of course.

You’ve already taken care of your debt, hopefully all of it was included in the bankruptcy. Debt is a major factor on your credit report, so it’s great that you don’t have that to take care of anymore.

Your payment history, however, was adversely effected by the bankruptcy. This is where rebuilding can come into play and help you improve. If you rebuild your payment history with on time payments and a variety of different types of accounts in good standing, you will help take the focus off of that black mark. In fact, as these new payments build up, your bankruptcy will become less and less important. Of course it will still matter, but by the time two years have passed and you have built up a history of on time payments on a secured credit card, small secured loans, and at that point even some history with traditional unsecured cards, and your other accounts, you should be ranking in a good decent range on the credit score scale.

Of course, all of this depends on you making those payments on time. If you make any late or missed payments, or if you rack up new debt on your credit report after bankruptcy, that is going to count double against you because of your bankruptcy. People are not going to want to do business with you and it will be ten times harder to ever build your way out of this hole. That is why it is essential that every move you make is made very carefully. You need to build a budget and stick to it. You need to have an emergency savings account of at least fifteen hundred dollars, so that if things come up you are prepared. And you need to keep a careful eye on your bank account and credit report.

These are all just basic things. There are no quick tricks to fixing your credit after bankruptcy, you just need to be careful, take your time, and don’t let it take over your whole life.