When it comes to understanding your credit score range, there are two ranges that are commonly used by lenders: FICO and VantageScore. Both use the same calculation and information, but the categories they utilize are different. The FICO score categories are Exceptional, Very Good, Good, Fair, (Very) Poor, and No Credit. VantageScore’s categories are Superprime, Prime, Near Prime, and Subprime. While age is not a variable in calculating your credit score, it can still have an impact. If you find your credit score lacking, then there are some ways that you can improve it with a little diligence. Find out what your current credit range is:
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Why Should I Know My Credit Range?
It could be argued that knowing your credit score is critical knowledge in modern society. But do you know what your credit score represents to potential lenders? What does your credit score say about you as a potential lending customer? Is there a particular credit score you should have at your age? And is there any way to possibly improve your score, even incrementally? We will be looking at these questions in the following article.
Your credit score is calculated using a formula and variables like your payment history, the number of accounts you hold, and your debt-to-credit ratio. The resulting figure indicates the credit risk you represent. There are two versions of your credit score; both are calculated similarly, but the credit score range differs by the method.
The FICO Credit Range
The most well-known credit score is the one created by the Fair Isaac Corporation (i.e. the FICO score). On the FICO credit score range, Exceptional Credit scores are those that are 800 and above. The bracket below that is Very Good credit scores (740 to 799). Good Credit scores are those that come in between 670 and 739; if your credit score is here, then you are near or slightly above the 2017 FICO average (700). Fair Credit scores are next and the range is from 580 to 669. The last category is composed of those scores that are considered (Very) Poor (anything under 580). If you have a score below 350, then you are considered to have No Credit.
Where you fall on the credit score range impacts how lenders view you as a financial actor, and the rates they are willing to offer you. People with Exceptional and Very Good credit scores are considered to be either consistently or generally responsible financially. And these people tend to receive lower or competitive interest rates because they are viewed as being a low risk for defaulting on agreements. People with Good or Fair credit scores are considered less financially responsible relative to people rated as Exceptional and Very Good. Lenders will likely offer them credit, but some types of credit may not be available and the interest rates less competitive. Compared to the others, having a (Very) Poor credit score represents a significant financial risk. Very few lenders would be willing to extend credit to an individual in this condition. The same is true for those whose credit scores have fallen to below 350 (i.e. they are considered to have No Credit)
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VantageScore Credit Range
The second and increasingly used score range is VantageScore; a credit score range created by Equifax, Experian, and TransUnion (i.e. the three major credit bureaus in the U.S.). As stated above, the VantageScore is calculated using a formula similar to the FICO score. This means that changes on one scale can be tracked on the other. The only difference is the meaning given to the values via categorization. Superprime credit scores are those that range from 781 to 850. The next category is Prime credit scores and range from 661 to 780; if your credit score is here, then you are near or above the 2017 VantageScore average (675). The next lowest category is Near Prime and is composed of scores that range from 601 to 660. The lowest and final category is Subprime with a score range of 300-600.
Just as the categories are organized differently, what they mean to creditors is also slightly different. For instance, you will recall that a FICO score of 580-669 was considered Fair and could still qualify for credit (albeit with less competitive interest rates). But on the credit score range created by VantageScore the category for generally being approved starts at Prime (i.e. 661 to 780). A credit rating of 580 would still be considered Fair on the FICO scale. But on the VantageScore, you would be considered a Subprime borrower.
Is your score below 600 or 580? Has it fallen below 350? Click below to find help to get your credit back on track.
What is the Average Credit Range?
As reported above, the 2017 FICO national average was 700 (675 for VantageScore). Your credit score calculation doesn’t take your age into account, but 15% of the calculation is determined by the duration of your credit history. That puts younger borrowers at a disadvantage. In 2017, the average score of people aged 18-29 was 652, 30-39 years was 671, 40-49 years was 685, 50-59 years was 709, and 60 years and older was 743. You can see immediately that three of the age categories are all below the FICO average. Though compared to the VantageScore average, 30-39 year-olds are near it and 40-49 year-olds are above it. Hopefully, this gives you some context as to where you are relative to your age grouping. Perhaps that knowledge is reassuring, or maybe it has provided the wake up call you needed to motivate you to work on your credit score.
If it is the latter, then the good news is that there is Hope. Improving your credit score requires diligence but is not impossible. Some basic steps in the right direction are paying your bills on time, keeping a low balance on credit cards, paying your debts off, and avoiding opening new credit accounts unless necessary.
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