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Annual Credit Report
According to federal law, you are entitled to receive copies of all three of your credit reports. One the credit report, you will see both your fico score and your vantage score. You will also see your credit history and any negative comments or entries on your credit report. You are also entitled to get a free copy of your credit report when you have been turned down for credit.
Fico Scores
Fico scores come in the range of 300 to 850. The lower your fico credit score, the worse your credit will be.
Credit scores in the range of 800 to 850 are considered excellent. If you have a credit score in this range, then you have almost perfect flawless credit and should be able to qualify for superior loan terms, including a lower interest rate on home loans, car loans and insurance.
A credit score in the range of 720 to 799 is considered very favorable. Although this is not absolutely perfect credit, you can still qualify for some of the best loan terms available.
Credit scores in the range of 680 to 712 are still considered good credit, but may have one or two negative comments on your credit report. You will still qualify for some of the best interest rates and will largely be given access to excellent credit card terms.
If your credit score is in the 620 to 679 range, you still have good or average credit, according to many lenders. You may have a few negative comments on your credit report and may find that interest rates offered to you are not the absolute best but they are good.
A credit score in the 580 to 619 range, then you are beginning to have bad credit issues. There are usually several negative comments on credit reports with credit scores in this range.
A credit score that is in the 500 to 579 range definitely have bad credit. It will be difficult to get a loan with a good interest rate if your credit score is in this range. If this is the case, then your credit needs rehabilitation and for negative comments to be removed in order to raise your score higher.
Extremely bad credit is assigned to those who fall at the absolute bottom of the credit score range, with scores as low as 500 or below. For these people, it is almost impossible to get a loan or have credit extended to them.
What is a Vantage Score?
Recently, all three credit reporting agencies (Experian, Equifax and TransUnion) introduced a secondary credit score system. This system is called a vantage score.
The range for vantage scores is 501 to 990. As part of the vantage score system, credit scores are given a letter grade. The lower your vantage score, the lower your grade will be. For example, if your vantage score is in the 500 to 599 range, then your vantage score will be an F. The letter grades scale upward every hundred points until you reach an A at the 901 to 990 point.
Vantage scores were introduced as an alternative method for lenders to evaluate credit on loan applications and other financial transactions.
Usage of Credit Scores – An Example : How Landlords Use Credit Scores
Although landlords use credit scores as part of their evaluation process, there is no one formula that is used by property managers. In many cases, the credit score is only one aspect of deciding whether or not to take on a renter.
Other issues that landlords use are employment history, rental history and monthly debts. Most property managers are looking for a debt to income ratio for rent as no more than 45 percent of income.
Understanding your credit score range can be somewhat confusing, but once you understand what the ranges represent and how they are used, then they become clear.