You may be wondering the scale for credit score and what the FICO credit score range is if you need a loan or credit. Understanding your credit score can get confusing and these are just a couple of questions many people have. If you’re trying to find out how you rank on the scale for credit score and get a better understanding of the process, read these frequently asked questions for help.
Question #1 – What is a “FICO”?
When you go to borrow money or get a loan and lenders refer to “your score”. What they’re talking about is your FICO score. This score is the same thing as your credit score. The FICO was developed Fair Isaac Corporation and is the standard that lenders use when deciding whether or not to lend you money.
Question #2 – What is the Scale for Credit Score?
FICO scores can range anywhere between 300 to 850. Most people score between 600 to 700 but the higher your score the better.
Question #3 – Where do Lenders Get My FICO Score?).
There are 3 national credit reporting agencies (CRAs) in the United States. These CRAs are Equifax, Experian, and TransUnion. When you apply for credit or a loan, the lender needs to check your credit score to see if you’re a safe risk. To do this, they buy your credit report from one of these three CRAs.
Question #4 – What is a Good Credit Score?
Lenders like to see credit scores that are above 700. To them, this shows that you are a good credit risk and that your finances are in good order. When you have a credit score below 600, lenders see you as a credit risk. They might still give you credit or a loan but you’ll pay higher interest rates.
Over the long run, higher interest rates means whatever you’re buying is costing you more money. With a credit score of 720, you might be able to get a 30-year mortgage at 5.5% interest but if you have a score below 600, they might charge you as much as 8.5% interest for the same loan. Over thirty years, this means you’ll pay $72,000 more on your mortgage loan.
Understanding FICO, your credit score, the FICO credit score range, and the scale credit score are all important to your financial health, getting the credit you need, and saving money. Learn more about your credit to save money and get the best credit and loan rates possible.