A Layman’s Guide to the FICO Credit Rating Score

The FICO is an acronym for Fair Isaac Corporation who first developed and used the system a long time ago. It is reputed to be an accurate and fair measure of a loan applicant’s credit worthiness. The score was developed in an effort to simplify the process of computing for risks involved in approving a credit application.

The FICO score also called the credit score rating is one of the most significant numbers in your economic life. It is a number representing the total statistical scrutiny and breakdown of an individual’s credit files. This short guide to the credit score chart was intended to give you a summary of what that 3 digit number called the Fico Score is all about.

Your credit rating is based on the data provided by one of the three major credit bureaus: Experian, Trans Union and Equifax. Income is not among the criteria used by these major credit information providers when computing a credit score.

The credit score chart range is from 300 to 900, but 849 is the highest possible score that an individual can get. Average credit score for Americans is about 720 which is really a fine score.

Credit ratings below 500 are considered unacceptable credit risk while ratings from 500 to 559 are very poor, the credit applicant will have a hard time to get a loan if ever, and it will be on very onerous terms and high interest rates.

Ratings from 560 to 619 are still a poor score but never the less improves the chances of loan approval as compared to the previous group. You are still considered high risk and the interest rates should still be high.

Scores between 620 to 659 means a better chance of loan approval and better interest rates. Interest rates in this category will still be higher than market rates.

Rankings between 660 to 699 are considered good. You should not have any difficulty getting a loan. The terms of the loan will be less hard and the interest rates attractive.

Ratings between 700 to 759 are a very good credit score. It should give you admission to good loan offers at attractive interest rates.

Scores from 760 to 849 are excellent scores with 849 as the highest probable rating. Best loan terms and interest rates in the credit market should be granted to you.

Get your FICO ratings now. It will give you the opportunity to gauge your own credit worthiness and learn what your creditors are saying about you.

Source by Peter Sibierski

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