Low, Average, and High Credit Scores Which One Do You Have?

February 16, 2019

Not the easiest financial subject to understand, and yet one of the most important, is credit scores. What may seem like just a simple 3-digit number houses so much information and history that it singlehandedly can make your loan the best deal you’ve ever gotten. Or it could prevent you from getting the loan altogether.

Credit scores may seem random and an arbitrary system based on happenstance and coincidence. But there are ways to understand credit scores and why they work the way they do. Want to know how? Then, with MaxCash’s help, let’s get started.

How your Credit Score is Created

Credit scores don’t just come out of nowhere, but how are they determined? Your credit score is calculated based on a similarly named document known as your credit report.

A credit report is a document listing of all your credit history, made up of five different categories. Each of these 5 categories is given a percentage weight towards your credit history, and each covers a different part of being responsible with credit.

The five criteria your credit report covers are:

  1. History – How consistently you’ve been able to pay back your bills and loans in the past is important. This is the most important category when it comes to getting a new loan, and as a result, makes up 35% of your score. Missing a payment will significantly damage your score, but the damage isn’t permanent. Over time, missed payments will slowly repair.
  2. Present Debt – Current, present debt is the second largest chunk of your credit score, and thankfully, also the easiest to alter. This score is simply based off your current debt. The more outstanding loans or credit card charges you have, the lower this part of your score will be. However, your score will improve when you’ve paid off those debts. Paying off your credit cards and loans before making a new loan inquiry is a good idea.
  3. Duration of Credit – This is the simplest category to understand, but the hardest to actually influence. This category measures how long you’ve been using credit. If you’re just starting out with credit, this score will be lower. But the longer you use credit and borrow funds, the higher this score will go.
  4. New Credit – This category is one that can be tricky to understand. This category is determined by how recent your last loan was. If you’ve recently finished paying off a loan, this score will be higher. If your last loan was ages ago, this category will be lower. However, taking out a bunch of loans just for the sake of boosting this score will knock down your score as well. Thankfully, this part is only worth 10%, so pay your loans off regularly and this category should handle itself.
  5. Multiple Credit Types – The different types of credit you have experience with. Having only experience with credit cards could mean you wouldn’t know how to deal with a home loan, life insurance, or another type of financial responsibility. Having a varied portfolio of credit types will give you more points here in this final 10% chunk.

So now that you know how credit scores are calculated, hopefully the idea of what they represent makes more sense. Those 3-digit numbers are a stand-in for your entire credit history, showing lenders just how trustworthy you can be with borrowed money.

But how do you know which credit scores are good and which aren’t?

Which Scores are Good and Which Aren’t

There is a list of tiers upon which credit scores are ranked. This list ranges from the lowest score of 300, all the way up to 850, the best. But within that 550-point range, there’s a bit more nuance.

In fact, the credit score rating you generally want to maintain might be higher than you think.

  • Above 720 – Any score above 720 is generally the level you want to aim for. It’s the credit score level where the best financial deals are made, and that the most experienced credit vets have.
  • 680 to 720 – A score ranging between 680 to 720 is the next category, which is still considered very good. 682 is the average credit score, so if you’re at this level, feel free to pat yourself on the back.
  • 620 to 680 – A score ranging from 620 to 680 is the next level down. This section is considered good, with decent financial deals available to those who land in this area.
  • Below 620 – Unfortunately, this is the worst category to be in. Dropping below a score of 620 officially gets you categorized as a credit risk, meaning lenders will start denying you loans and giving you less than good deals. If you end up in this category, you might want to look into improvement plans before doing any borrowing.

And there you have it: a breakdown of which credit scores are good, average, and bad. With all this in mind, it may seem like a credit score below 620 is the end of the world. But this is far from true!

In fact, MaxCash offers programs that accept people of all kinds of credit levels. Interested? Then contact us at MaxCash now to find out more!

DISCLAIMER:
The MaxCash website does not offer or provide loans, but rather, it offers a service. It should not be construed as a lending agent or broker. The site does not endorse any lenders and does not charge visitors any fees. The website owners do not evaluate potential lenders’ applications, nor do they approve or deny credit. The MaxCash website does gather applicants’ personal information and transmits it to lenders that are part of the site’s lending network. No one is required to make use of this website, nor are they under any obligation to begin contact with site operators or to attempt to secure a loan with any of the site’s lending partners. Transmission of your financial and personal information on the website in no way obligates lenders to offer you a loan or any other kind of credit product. Be aware that cash transfer times can vary, depending on the lender and the bank you use. It may be necessary to fax information under certain circumstances. All questions about loans, and any concerns you may have should be directed to your lender. These loans are intended as short-term financial solution to satisfy borrowers’ needs for immediate monetary relief. This is not intended to be part of a long-term financial plan for individuals. These services are not offered in all states. Potential borrows may undergo credit check if lenders choose to use any of the major credit reporting bureaus, including Equifax, Trans Union and Experian. They may also use other alternative sources to check credit ratings. Your request for a loan constitutes your agreement and acknowledgement that (A) your personal data may be shared with lenders and perhaps other third-party partners, and (B) lenders can acquire credit bureau reports that detail your credit history. Reports from major credit bureaus, such as Equifax, Experian and TransUnion may be obtained and used to evaluate your reliability as a borrower.

1Loan amounts by the lenders vary based on qualifications.

2Since we do not lend money directly we cannot offer you a solicitation for a loan. In all serviced states we WILL match you with a lender based on the information you provide on this website. We will not charge you for this service and our service is not available in all states. States that are serviced by this Web Site may change from time to time and without notice. Personal Unsecured Loans are not available in all states and all areas.

3Loans such as, Auto Title Loan companies typically do not have pre-payment penalties, but we cannot guarantee that every lender meets this standard. Small Business Loans typically do have pre-payment penalties and occasionally will use your car as collateral to secure the loan. Other types of loans may have pre-payment penalties as well.

4All lenders are responsible for their own interest rates and payment terms. Max Cash has no control over these rates or payments. Use of the work competitive or reasonable does not mean affordable and borrowers should use their own discretion when working directly with the lender.

5The amount of people who applied for a loan and we helped and those who received a loan is not the same. We cannot guarantee we will find a lender who will fund you. Just because you give us information on this web site, in no way do we guarantee you will be approved for a car title loan or any other type of loan. Not all lenders can provide loan amounts you may see on this web site because loan amounts are limited by state law and/or the lender. Some lenders may require you to use a GPS locator device on your car, active all the time, in the circumstance for an auto title loan. They may or may not pay for this or charge you for this. This is up to the lender and we have no control over this policy of the lender. Typically, larger loans or higher risk loans use a GPS.

In some circumstances faxing may be required. Use of your cell phone to receive updates is optional. Please review our privacy policy.

Loans such as Car Title Loans are expensive and you may have other ways to get funding that is less expensive. These types of loans are meant to provide you with short term financing to solve immediate cash needs and should not be considered a long-term solution. Residents of some states may not be eligible for a loan. Rejections for loans are not disclosed to our firm and you may want to contact the lender directly.

Signature and personal loans are only available in Georgia and Florida. Loan amounts differ at locations. Account approval requires satisfaction of all loan eligibility requirements, including a credit inquiry, and, if applicable, motor vehicle appraisal.

Car Title Loan lenders are usually licensed by the State in which you reside. You should consult directly with these regulatory agencies to make sure your lender is licensed and in compliance. These agencies are there to protect you and we advise making sure any lender you receive money from is fully licensed.

© 2020 Tradition Media Group, LLC MaxCash. All Rights Reserved.