Credit Score Scale

There’s a number that not very many people understand, but is assigned to all of us, and it’s your credit score. This number tells your landlord, the bank, companies, your employer, and many other people whether or not you’re a trustworthy person. They judge whether you’re responsible with your money, and then make the wider judgment on whether they should trust you in general. This may not seem fair, but it’s how it is, and is the reason why your place on the credit score range matters, a lot. Whether you like it or not, and no matter how hard you try to avoid it, it will come up that people will want to check your financial history, so you might as well learn what the credit score scale is, how it works, where you stand, and what you can do to improve your situation so that this number starts working for you instead of against you.

The numbers range from about 350 to 850, but really most people fall between 500 and 750, because numbers on either end of the scale are so rare. If you’re under 600 you’re in a pretty bad place financially. Ideally, you want to be at about 720, but anything over 680 is really great.

You’re probably wondering what kind of a difference a 680 is going to make compared to say a 600. Well, with a higher place on the credit score scale, you’re going to have an easy time getting accepted when you go to apply for anything financial, and you’ll get offered the best interest rates. When you go to apply for any kind of insurance, you’ll get offered the best interest rates. When you go to apply for a loan, you’ll not only get easily accepted, but you’ll also get offered lower interest rates. So, not only will it be easier for you to get applications approved on financial things, but you’ll get offered better interest rates because companies will want to work for you. And when you go to apply for a well paying job that asks for a credit check, it’s just another way that your potential employer will see that you are a responsible candidate who has things together.

On the opposite side of things, when you have a bad score, you’ll have a hard time getting approval for most things at all. You’ll get offered really high interest rates. Things will generally be more difficult, and more expensive, for you. It’s difficult to get things done, and to be able to afford to do them at all.

In these ways, it’s important for your overall financial well being to be as high up on the credit score range as you can manage. Your number is calculated based on the information in your financial history, so it’s important (and easy and free to do online) to get a copy of your report and see what it’s in there, and fix what you can. First check it over for mistakes, like credit limits marked lower than they are, late or missed payments that you actually made, etc, and then start trying to fix your mistakes that you can. Every little thing you can do will help improve your situation. After you’ve worked on fixing your past mistakes, focus on rebuilding by keeping up to date on all of your payments and keeping a healthy and active financial life.

The more you can do to move up the credit score range, the easier-and cheaper, your financial life will become.