What is a Good FICO score?
We all know that credit comes along with compromise, responsibility and good financial history. That’s definitely no secret but the essence of any credit score. One of the most reliable and traditional companies to take your credit scores is FICO and the register is actually known as FICO scores.
But what are FICO scores exactly and how do you know if yours is updated and at a good level? Well, that’s exactly what we want to help you discover. Let’s start with a short concept for introducing the scores.
What are the FICO scores and how they work?
FICO scores as we said before are the recording or register of your credit history; they reflect whether or not you’re a payment skipper or if you pay always on time, and if you tend to delinquency or are reliable. These scores build your reputation for any loan or borrowing situation.
It’s important to maintain a respectable FICO score in order to pay fewer interests when borrowing. A person who tends to miss their payments will surely have to pay more interests if they want to borrow and if the credit score is bad enough, you can even be banned from lenders. On the contrary, a person who has never skipped a payment will always find bigger loans at lower interests. It’s also the way lenders calculate the risk you represent and the possibilities of declaring “bankruptcy”.
It’s important to remember that these records exist only because the lender reports your payment activity to credit bureaus so make sure to ask and if it’s a private lender chance are they won’t include the service so if you want your FICO score to increase, take care of the situation and report the payments yourself.
What affects your FICO score and what doesn’t?
Something that will definitely affect your FICO score is the “human mistake” factor; if any wrong data is entered In your credit report, this could decrease your credit score even up to 0,750%. So, you’ll need to regularly check on your score status by coming to any of the three regulated credit report agencies.
What doesn’t affect your credit score is your income; it doesn’t matter if it’s high, medium or low as the payment commitment of a person is rarely determined for what they earn. Actually is pretty common to see delinquency around wealthy people than it is around less opulent people.
So, what are the FICO scores ranges anyway?
The ranges are quite specific and were determined by the Fair Isaac Corporation which is, of course, FICO score creator. The fixed ranges are:
800 and above for exceptional (1%delinquency)
740-799 for very good
670-739 for good.
580-669 for fair.
579 and lower for poor (61% delinquency)
Of course, as we mentioned at the beginning, these ranges are directly linked to the interests you should pay for borrowing or shopping for a mortgage as lenders are obviously willing to charge much more to those ones that are more likely to run away.