Beginner’s Guide to Understanding Credit Score

Managing your credit can be a daunting task. With multiple agencies that report credit status and a complex scoring system, it’s no wonder many consumers are often left confused and frustrated when trying to learn more about their credit scores. However, there are some basic things anyone can learn to understand better how their credit is ranked.

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Here are some important things to remember when checking your credit score:

The Ranking System

Credit ranking is reported as a number from a scale ranging from 300 to 850. The higher the score, the better a consumer’s credit is considered. If you are on the low end of the range, the harder it will be to get approved for loans. Here is a further breakdown of the scoring system:

Scores 300-579 (Very Poor)

Scores falling within the range of 300 to 579 are considered very poor. Individuals with credit ranked as “very poor” will have difficulty obtaining loans from lenders. Banks and other financial institutions will not typically lend to someone in this range. Potential borrowers will also find it hard to get approved for credit cards unless secured with a cash deposit when applying.

Scores 580-669 (Fair)

Scores falling within the range of 580 to 669 are considered fair by financial institutions. Consumers with this credit ranking will have difficulty receiving loans with low-interest rates. Lenders will consider these borrowers as subprime, meaning they would only be eligible for loans with high interest rates and fees.

Scores 670-739 (Good)

Scores that fall within the range of 670 to 739 are considered good. This is the average credit ranking for domestic consumers in the United States. In this range, borrowers will qualify for a multitude of different loan offers with interest rates slightly higher than consumers with better credit ratings.

Scores 740-799 (Very Good)

Credit scores from 740 to 799 are considered very good by banks and lending institutions. Within this credit rating range, consumers will be eligible for most loans at reasonable interest rates that are better than the national average.

Scores 800-850 (Exceptional)

A credit rating that falls within 800 to 850 is considered exceptional. Borrowers in this category are offered enticing interest rates much lower than the national average. Consumers with exceptional credit also have fast-tracked approval processes so that they can obtain loans faster than others.

Building Better Credit

Understanding your credit score is only the first step in taking power over your credit ranking. By learning more about where you stand with banks and other financial institutions, you will be able to take the proper steps to better your credit and better your life.

Quantity Credit Repair is a leading provider of credit counseling services in Philadelphia, PA, and the surrounding area. Our experts are here to help you rebuild your credit and get control over your life. For over 20 years, Quality Credit Repair has provided financial counseling and credit repair services to consumers. We advise a broad range of clients, from those recovering from bankruptcy to young consumers just beginning their financial journey. For more information about our services, contact us today!