Breaking Down Your Credit Score – A Quick & Easy Guide

June 10, 2023

Your credit score can greatly impact your purchasing power and ability to get approved for loans, among other things. A higher credit score grants you privileges such as lower interest rates, a wider range of financing options, and access to appealing credit products. Conversely, a subpar score could prevent you from qualifying for a new credit card, loan, or mortgage and affect your ability to sign up for services. If you have a low credit score, you might even need assistance from the best credit restoration companies.


Defining the credit score


Your credit score consists of three digits, usually from 300 to 850, and it estimates your ability to pay bills and repay debt. As such, it is based on your credit accounts, which credit-reporting agencies or credit bureaus examine to compile your information on a credit report. If you’re wondering what these agencies are, the largest ones are TransUnion, Equifax, and Experian. That means you could have a few different scores. 


850 is the highest score anyone can get, but that doesn’t mean you should strive for that. There won’t be much difference between an excellent and perfect credit score when you consider the products and rates you could qualify for.

Who calculates credit scores?

Two companies are trusted for credit scoring: FICO and VantageScore. Your scores will be different from each because it depends on the credit bureau providing your credit report data.


What’s an acceptable credit score?


While creditors have unique standards, most would consider these ranges:

  • Bad: 300-629
  • Fair: 630-689
  • Good: 690-719
  • Excellent: 720-850

Additionally, factors like your debts and income can impact a creditor’s decision to approve your application. If you are having difficulty getting approved every time, it’s time to consider help from one of the best credit restoration companies.


What affects credit scores?


VantageScore and FICO typically look at how you use your credit and payment history to determine your score. In some cases, they will also consider your credit mix, credit age, and how recently you applied for new credit.


How to improve a credit score


Your credit score measures your creditworthiness and gives an insight into your financial habits. With this in mind, here are some ways you can improve your score:

  • Maintain credit card balances under 30% of their credit limits
  • Pay your bills early, preferably before their due dates
  • Apply for credit sparingly
  • Don’t forget to use your old credit cards
  • Maintain a good mixture of cards and installment loans

Get more details from experts!

Do you need advice from the best credit repair companies? Talk to us here at US Best Credit Solutions! Your first consultation is on us.