Credit Scores range between 300 and 850; the higher the number, the better the score. As your score increases, your credit risk decreases. Each of the three credit bureaus (Equifax, Trans Union, and Experian) has a slightly different score, so the average score is used. If your credit score is above 680 you will probably qualify for a standard loan. If your score is under 650 you will likely experience difficulties receiving credit at a favorable rate.
About credit scores
When you apply for credit – whether for a credit card, a car loan, or a mortgage – lenders want to know what risk they'd take by loaning money to you. FICO® scores are the credit scores most lenders use to determine your credit risk. You have three FICO scores, one for each of the three credit bureaus: Experian, TransUnion, and Equifax. Each score is based on information the credit bureau keeps on file about you. As this information changes, your credit scores tend to change as well. Your 3 FICO scores affect both how much and what loan terms (interest rate, etc.) lenders will offer you at any given time. Taking steps to improve your FICO scores can help you qualify for better rates from lenders.
For your three FICO scores to be calculated, each of your three credit reports must contain at least one account which has been open for at least six months. In addition, each report must contain at least one account that has been updated in the past six months. This ensures that there is enough information – and enough recent information – in your report on which to base a FICO score on each report.
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