Normal credit score ranges for free#

This is a recent FICO score of mine from American Express that is provided for free monthly. And other FICO models have even stranger numbers that don’t seem to make any sense.Ī: While it’s true that there are numerous scoring models used by lenders, most versions of the widely used FICO score (Fair Isaac Corporation) have a base range of 300 to 850, with higher scores representing less risk. However, some versions of the FICO score, such as those used for auto loans/leases, start from as low as 250 and climb as high as 900. If you’re wondering how FICO came up with their unique credit score scale, as opposed to say 1-100, when the score was first developed the limits were not constrained, and 300 was the lowest score and 850 was the highest, based on their data and algorithm. After all, “A’s” and “F’s” would just be arbitrary letters if we didn’t assign them values beforehand. Just as you would if you were taking a test in school, without one, a score is meaningless. Knowing these details can improve lending decisionsīut remember, to effectively evaluate your credit score you’ll need a range as well.And better manage their available credit.This way we can better understand who will pay their bills on time.A range is necessary to compare the credit risk of consumers.

We Need a Credit Score Range for Comparison Sake Seriously, a higher credit score can equate to a lower interest rate on student loans, a personal loan, a mortgage, a credit card, and so on. A good one can save you money, a lot of it. I hope this illustrates how important credit scores are. The lower your score, the more risk you present to the lender.īy risk, I mean the chances of missing a payment, something lenders don’t like too much.Īs such, those with higher scores will have an easier time getting approved for credit cards and loans, and they will enjoy lower interest rates than those with low credit scores. The higher your credit score, the less risk you present to the lender. So those with lower scores will pay more for the credit they receive.Lower scores mean there’s a greater chance you’ll miss a payment.Higher scores mean you present less risk to the lender.Credit scores are used to determine the risk of payment default.They are used both as a tool to approve or decline your credit application, and to determine an appropriate credit line. In a nutshell, credit scores are risk scores utilized by lenders to determine the likelihood of you defaulting (missing a payment) on a credit obligation.

The so-called “credit score range” for the standard consumer FICO score is 300 to 850, though other credit scores, such as the older and less popular VantageScore, start at a higher 501 and rise to 990.īefore you go announcing your score to the world, get a better understanding of what that three-digit number actually means. Like all other scoring models, credit scores have numerical boundaries that give the otherwise arbitrary figures context. So you know your credit score, now what? Brag to your friends? Compare it with your co-workers?