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What Is A Low FICO Credit Score? So, although there isn’t just one score, the FICO score certainly is a main deciding factor whenever a credit score is computed. Since there are many types of credit scores which are developed by independent companies, credit reporting agencies, and even some lenders it’s hard to lock down your credit history; but as a rule, the higher the FICO score, the better you’ll be. Since each credit reporting agency calculates your score differently, each score may be different because the credit history each agency has about you may be different. Certain lenders may make a credit card or auto loan decision based on a single agency's score, although others such as mortgage lenders often will look at all three scores. 
Because your credit scores change when your information changes at that credit reporting agency, that’s good news! It means you can IMPROVE a poor score over time by improving how you handle credit.
Even insurance companies use something similar when setting your insurance rates, it’s called the “credit-based insurance score.” You might be able to improve your insurance score by improving how you handle credit, which in turn may lower your premium payments on auto or homeowners insurance. Be aware that some insurance companies don’t check your credit scores for years, so if you’ve had one insurance company for many years, your credit rating might drop even though you have impeccable credit because, according to them, you haven’t gotten any new credit cards for years (their records can’t show you’ve gotten new cards if they don’t update their information). Some credit scores that are offered to consumers are merely estimates and are different from the credit risk scores that lenders actually use, although they might appear similar. Consumer reporting agencies and other companies use an estimated score to estimate that consumer's general level of credit risk. You can tell how a score is estimated by asking that company if the score is used by most lenders. If it isn't, your score was estimated. What’s NOT in your score? By law, credit scores may not consider your race, color, religion, national origin, sex or marital status; nor can they say whether you receive public assistance or exercise any consumer right under the federal Equal Credit Opportunity Act or the Fair Credit Reporting Act. Thus, In the eyes of most lenders, FICO credit scores above 700 are very good and a sign of good financial health. FICO scores below 600 indicate high risk to lenders and could lead lenders to charge you much higher rates or turn down your credit application. Remembering that your credit scores can be as low as 300, that’s a long way to climb if you’ve recently had a bankruptcy, your credit plummeted because of your being unemployed for a long time with no ability to keep up the minimum payments, which is currently occurring all across the country. It will take some time to rebuild your credit scores, if this is the case. Don’t give up, though... if you rebuild the credit history, your credit will once again in a few years be back to what they were. Get Your 3 Free Credit Scores For $0 |
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