You know when you want to get a car loan or need approval for a credit card, the first thing that the bank does is take a good long look at your Credit Score Range and there is this long awkward moment during which they decide whether or not you deserve that loan and what interest do they plan on charging you? Your heart gets stuck in your throat during those moments because you start remembering all those student loan payments that you delayed and those bills that you didn’t pay on time. Because let’s face it. Those things matter when it comes to your credit score.
To start it off, let’s give credit scores a more layman definition. Credit scores are a three digit number, based on different scoring models, which are an accumulation of all your financial dealings, whether it is the paying off your bills, your credit card payments, or your debts. Credit Score Range helps banks and lenders determine your credit worthiness. It helps them decide whether you are good to pay off a loan, what interest rate should you be offered, and what the appropriate credit limits are for you. Credit bureaus usually provide your credit report information. Your past credit history has a major effect on your credit score.
Now your credit score is a number between 300 and 850, the higher it goes, the more creditworthy you are supposed to be.
One of the most widely used credit scoring systems is FICO which was created by the “Fair Isaac Corporation”. This system considers five areas:
- Payment History
- Current level of indebtedness
- Types of credit used
- Length of credit history
- New Credit.
Based on these five areas, you are appointed a FICO score of between 300 to 850. A score above 650 is an indication of a good credit history whilst those below 620 will not be so lucky. It is the former that we will focus on. Let us discuss the advantages of the scores that fall above 650.
Now if you’ve been paying your bills on time, have made the effort to maintain your credit card balances and overall been managing your credit history very effectively and carefully, why should you not enjoy the perks that follow as a result. Whilst a bad credit score is not the end of the world, a high one can grant you so many favors.
Credit Score Range gives you the advantage of a boost in your credit card limits, lower interest rates, and better credit card deals and most importantly, it gives you more negotiating power.
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Now above 650 is a good credit scoring but it is not the highest. The highest credit score attainable is between 750 and 850. And attaining an 850 is next to impossible.
In 2012, a man named Tom Pavelka was named as having a near to perfect FICO score. A wise spender, the individual believed in making timely payments and never accumulating debt. Although his credit score seems almost too good to be true, it not entirely impossible to achieve. However, the point to consider is that do you really need that high of a credit score?
The entire purpose of highest credit score is so that you can take advantage of the best rates and credit limits when applying for loans or credits. There is an optimal level of 760 and your goal should be to either achieve that or a little higher.
Anything above 760 will keep you on the creditor’s A list as you will have proved yourself to be a reliable customer. Gaining a high credit score is not that hard. You should be making payments in a timely manner. Instead of accumulating your credit card bill, dispose of those payments every month and get it over with.
Another way to Achieve Highest Credit Score
Another way to achieve this goal is to not apply for new credits every so often. Manage the ones you have. Doing that is hard enough, how will you handle three more credit cards Credit Score Range? Don’t make purchases that you know you won’t be able to pay off. Be a wise spender. Also, get rid of all your accumulating debt. Your focus should be to pay those off. Especially if you start applying for new loans with your previous ones unpaid, your credit score gives off a bad impression.
Getting the highest credit score near to 850 means you have zero balances in your accounts and haven’t missed a single payment and your there is no black mark on your credit history which is kind of difficult seeing as you’re human and you’re bound to make mistakes so a perfect score should never be your goal Credit Score Range. But a very good one should be because financial intuitions do not look for a perfect score but they look for one which is quite good.