Knowing your credit score and what range it falls into is really important because your credit score determines if you’re able to get approved for loans and what the payment terms (your interest rate, monthly payment, or how long you have to pay the loan back) on those loans are.
Why does this matter? Because if you have a lower credit score, you’ll probably get quoted a high interest rate so you’ll end up paying more for your purchases in the long run.
While credit score ranges may be a completely new word in your vocabulary — don’t worry. We compiled the ultimate breakdown of each credit score range so you know exactly what your credit score means.
What even is a Credit Score?
Before we break down the credit score ranges, let's cover what a credit score is.
To put it simply, your credit score is a record of how well you’ve paid people back who have previously lent you money. Banks and lending institutions use it to determine how risky it is to loan you money.
Unfortunately, what you do wrong has a bigger impact on your credit score than what you do right. So, try not to make any mistakes.
Your credit score is composed of 3 numbers and ranges from 300 to 850. There are also different credit scoring models (the math used to figure out your credit score). The two models that are the most common are FICO and Vantagescore.
Also, you can have more than one credit score because there are industry/product specific credit scores like a car and home insurance credit score.
If you’re applying for a new car loan, you’ll want to make sure you know your FICO Auto Score, because that’s the industry-specific score used when determining most auto-financing.
If you’re first mortgage, you’ll want to know your base FICO Score, as that’s used most commonly for mortgage-related credit evaluations.
If you’re applying for a credit card, you’ll want to know your FICO Bankcard Score or FICO Score 8 because that’s the credit score more important to many credit card issuers.
For other types of credit, like personal loans, student loans, retail credit, and a new apartment, you’ll probably want to know your FICO Score 8, which is the score lenders use most often to evaluate your creditworthiness.
Understanding Credit Score Ranges
So, let's break down the credit score ranges that FICO and VantageScore use along with what they mean for you.
If seeing both sets of numbers is confusing, just remember that if your FICO score is high, your VantageScore is likely to be high and vice versa. Most lenders work with FICO scores as well, so you can pay a bit more attention to that one if you want.
How Does My Credit Score Affect Me?
Since creditors use your credit score to try and guess how likely you are to pay them back, having a lower credit score means you’re a riskier person to lend money to—because you’ve been less likely to pay back your debts in the past.
Here’s how your credit score range (FICO or VantageScore) could affect you and your financial options.
300 credit score, 400 credit score,
This is really the baseline when you’re building your credit from scratch or have a poor credit score. A creditor is probably not going to want to loan you money. And if they do, they’re probably not going to give you the best interest rate or repayment terms. If your score is in the 300-400 range, focus on building your credit (use EXTRA) so you can start off strong or improve your score.
500 credit score, low 600 credit score
If your score is in this range, you’ll have a few more options to choose from when seeking credit than if your score is in the 300’s or 400’s.
You might still be forced to get a co-signer when applying for loans and if you’re looking for a credit card, you’ll probably be offered a secured card (but use EXTRA instead, we’re better than secured cards at helping your build credit).
If your credit score is in the 500-600 range, you really want to focus on building your score by doing what you can to improve your payment history, credit utilization, credit mix, and length of credit history.
Mid 600 credit score to Mid 700 credit score
You’ll probably get approved for loans and credit applications. You can probably even shop around to try and get a good deal. But, you still might get charged a relatively high interest rate and not get the best repayment terms.
High 700 credit score, 800 credit score
Creditors can of course deny applications for whatever reason they want to (like having a lot of debt and a low income or a bad debt-to-income ratio) but with scores in the high 700s to 800s range, you probably won’t get denied because of your credit score.
850 credit score
You’ve got a perfect credit score! How does it feel? Enjoy getting offered a low interest rate and having options when it comes to repayment and other loan terms.
So What Now?
Now that you understand what your credit score is, what the credit score ranges are, and how your credit score can impact you depending on what range it falls in, you have the information you need to not only pursue a higher credit score if you score is low, but to understand your financial profile when you’re applying for credit.
It’s empowering isn’t it?
Of course, your credit score doesn’t guarantee you anything. Like we said, lenders may use your FICO or VantageScore as a baseline, but they all have their own (and different) metrics for what they internally think makes someone a safe bet when it comes to loaning them money. So, they really can approve or deny you for any reason whatsoever.
The good thing is that since you have a better idea of how you look to a lender now, you can and should feel empowered to advocate for yourself, shop around, and even try and make an educated guess on whether or not you’ll get approved based on the information a lender presents to you when you’re applying for a line of credit.
And if your score isn’t where you want it to be, then try out EXTRA.
We don’t need a credit check either so if you are on the lower end of the credit score range (300-400) you can start building your credit with us today.
How? We’re glad you asked!
When you use EXTRA for everyday purchases, we spot you for your purchases and then pay ourselves back for them the next business day. At the end of the month, we report those same purchases to the credit bureaus as credit worthy payments which builds your credit score.
