About Credit Score

Credit Score Makeup

Well in America wherever you go for big shopping such as Car, boat, furniture, jewelry, and home buying or borrowing a big loan for land/home or a personal loan, your credit score will be checked by businesses before making a decision on your credit request. Every bank, financial institution, lenders and big business do check every potential customers credit score before lending big money. What exactly is credit score? To know more about this subject, let’s understand about credit score

Credit score is a 3-digit number drawn after statistical formulas are applied on an individuals credit file. Company called Fair Isaac developed the formula and their formula was called as FICO. Developed in 1970 by Fair Isaac, the credit score over the years has become a decision tool for financial institutions and lenders to judge the trustworthiness of a loan applicant. The higher credit score a loan applicant has it gives comfort zone to lenders in offering loan to borrowers. The higher credit score cuts the credit risk for lenders.

Credit Score Range

The FICO scoring model has eight categories to classify an individuals credit health. The FICO based credit score ranges between 350 to 850. Each range is labeled under credit score category.

350 – 499
500-549
600-649
650-699
700-749
750-799
800 – Above. More on credit ratings..... www.eCreditScore.us

Credit Score Categories

Based on persons credit score number people are classified into excellent credit, good credit, fair credit, bad credit and no-credit categories. Anything below 550 credit score is considered bad credit, 700 to 770 is considered good credit and above it is considered excellent credit. This categorization of credit score help lenders to cap loan to applicants and keep credit card balance limits in check.

Read more on what is the makeup of credit score and why it is important to monitor credit score. www.eCreditScore.us