Credit scores are one of the most crucial aspects of anyone’s finances. The use of it goes beyond just finances though. When you need to rent an apartment or anything for that matter, a credit score check is run so that how responsible you are for your payments is known. The credit score scale helps people understand your credit score. If you have bad credit, it definitely will impact your life on a large scale, not just with financial institutions and lenders, but in any aspect of your life there’s money involved. Having said that, keeping an eye on your credit score is a great thing you can do for yourself.
There are scales to credit scores which are often used for measuring your credit score. Although there are many types of credit scores, we’ll focus on FICO credit score as it’s the one that is widely used by all sorts of financial institutions, whether it’s a bank or else.
The FICO credit score ranges from 0 to 850. But, it’s really hard for anyone to have a credit score below 300. So in a way, credit scores start from 300. Here is the scale to see where your credit score falls.
Very Poor: 0 – 300
Poor: 300 – 579
Fair: 580 – 669
Good: 670 – 739
Very Good: 740 – 799
Excellent: 800 – 850
All financial institutions use the above scale. You can see the performance of your credit score on your credit reports.
Did you know that you can get a free credit report annually?
There are a lot of things that go into calculating one’s credit score. We’ve covered how FICO credit score is calculated and how you can get your credit score for free. Regardless of your current credit score, know that it can increase or decrease, but the increases happen over a more steep period.
Those who have zero credit score might want to apply for a secured credit card to build their credit, and this would be the easiest way of establishing a credit score. If you have a steady income though, there shouldn’t be a way for credit card companies to issue you one, so talk to the nearest bank and show proof of income, and you might just get approved for an unsecured credit card right away.