What is a Credit Score?
A credit score shows how creditworthy you are. As with a report card,
you are striving to have a high score which shows you are more reliable.
Some of the things that help to determine your score are your income,
age, credit history, the amount of money you owe, if you are paying your
monthly bills in a timely manner, and if you have ever had a bankruptcy
in your name.
There are two credit scoring systems now.
FICO (Fair Issac) was the old system and is still being used. The highest
FICO score is 850 points. With FICO if your score is lower than around
630, you are considered a higher risk consumer.
The three CRAs have a new system. It is called the VantageScore.
SCORE GRADE CREDIT OUTLOOK
901-990 A Excellent rating; low interest rate
801-900 B Good rating but short of excellent
701-800 C Fair; moderate risk
601-700 D Higher risk means higher interest rate
501-600 F Highest risk; may not qualify for loan