How Credit Score Scale Affects your Financial Future

Before understanding how credit score scale can affect your financial future, you need to understand what it means. A credit score scale will help you in making sense of your credit score and its implications in your financials. Since banks and other financial institutions that extend credit based services to their clients pull up the credit report of loan applicants to find their FICO score and determine their creditworthiness, an awareness of the credit score scale is important to ascertain the interest at which you will be able to procure debt or a credit line.

Credit Score Rating Scale

The FICO score falls in the range of 300 to 850. The higher the score, the better are your chances of getting a better interest rate from the lender. The credit score rating chart divides the scores in various ranges that are listed below.

• Excellent: A FICO score in the range of 760 – 849 is deemed as an excellent score. If your score falls in this scale you can be rest assured that you will be offered the best rate of interest by the lender.
• Great: A FICO score in the range of 700 – 759 qualifies as a great score and if your credit score falls in this bracket, you will be offered a good interest rate by the lender.
• Good: A FICO score in the range of 660 – 699 is a reasonably good score that will fetch you reasonably good interest rate from loan provider.
• Fair: A FICO score in the range of 620 – 659 is considered a fair score that will help you get a loan though at a slightly inflated rate.
• Poor: A FICO score in the range of 580 – 619 is considered a poor score that will have an adverse impact on your financials as you will be offered credit lines at a very high interest rate.
• Very Poor: A FICO score in the range of 500 – 579  falls in the category of extremely poor score. If your score falls in this range, you will have difficulty in qualifying for any loan advanced by bank or Credit Card Company. Even if your loan application is accepted, you will be charged a very high rate of interest for the same and asked to pay a high collateral.

A credit core below 500 is deemed very low and no lender will be willing to extend a credit line to you. In such a situation, it is extremely important to take steps to boost your credit score.