February 25th, 2013

Credit Q&A Series: Credit Score Ranges

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Credit Q&A Series: Credit Score Ranges

Our very own founder and CEO Ken Lin has been making weekly appearances on The Ed Schultz Radio Show. He brings his knowledge of credit and finances to Ed’s listeners.

Recently Ken started answering listeners’ credit questions. We thought we would share those questions and answers here on our blog since we figure many others might have the same questions.

Read on!

Listener Question

“I don’t understand the number system with credit scores. What is considered excellent, good, moderate or poor credit scores?”

Ken’s Answer

We should first clarify that everyone has multiple credit scores. A lot of people think that you only one credit score and everything else is fake or not important. This is not the case. Each of the different credit bureaus uses information off of your credit report and their own algorithms to come up with your credit score. Banks and lenders can pick from any of those scores which work best for them. To help lenders make it easier to weigh consumer’s credit worthiness the credit bureaus set up credit score ranges. These ranges can also vary slightly from different credit bureaus and different economic times.

At Credit Karma we show you both your TransUnion and Vantage credit scores which range from 300 to 850 and 500 to 990 respectively. Here is a breakdown of the different ranges for your TransUnion score.

Poor: A poor credit score ranges from 300 to the low 500s. Those in this low scale will find it difficult to find lenders willing to extend them credit. In most cases consumers falling in this range will be hit with high interest rates and even additional fees.

Fair: A fair credit score ranges from the mid 500s to the mid 600s. If you score is within this group lenders will probably still be cautious when lending you credit. You will have limited options and most likely be offered high interest rates and low credit limits.

Good: A good credit score ranges from the high 600s to the low 700s. A score in this category will give you more options and show lenders you will probably not default on payments. Many lenders will offer you different types of credit like auto and home loans.

Excellent: An excellent credit score is anything that is 720 and above. Consumers who fall in this range are in good shape and will find they will receive most credit they apply for and a more likely to receive the best rates.

Bottom Line: It is best to know what range you are in since most credit scoring models will put you in the same range. Knowing where you stand can help you decide if it is a good time to apply for credit or if you really need to wait and improve your credit health first. If you still have questions about your credit range check our Credit Advice Center. Make sure to check back on the Credit Karma Blog for another question and answer session with Ken Lin, CEO of Credit Karma!

Amy

Amy Leone is the Public Relations Coordinator at Credit Karma. Before joining the team in June 2012 she spent most of her career as a TV news producer. When she’s not helping promote Credit Karma on a variety of media outlets, she’s probably out running or exploring her new state of California.

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10 Comments

  1. thanks! i was wondering about this….

    linda123456 at 1:01 pm on February 25, 2013
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    how to create a blog at 6:34 pm on March 3, 2013
  3. Most people don’t know that their credit score is not included on their credit report,
    solution this site please visit this site!!!!!!!!!
    thanks!

    credit score at 3:12 am on March 5, 2013
  4. How does one go about challenging a false entry in the credit scoring?

    rose alvarado at 6:55 pm on March 5, 2013
  5. I had a bunch of stuff taken off my report and paid down, and paid off some items over the last 2 months. How long does it take to affect my report and score on credit karma.

    Jamison Hurley at 11:48 am on March 11, 2013
  6. Jenna

    Hey Jamison, in most cases, you can expect your creditors to report new balances, payment activity, credit limit changes, or late payment information every 30 days. However, if you send an email to support@creditkarma.com, we’d be happy to look into it further.

    Jenna at 1:04 pm on March 12, 2013
  7. Most lenders consider a+ credit with no hits a 740+ score now days.

    Joel Lobb (@kentuckyloan) at 1:37 pm on April 17, 2013
  8. I had a question . If I payed off all the debts that appear on my credit report would that bring my score up and would they be removed ?

    Georgi at 9:20 am on April 5, 2014
  9. Mike

    Thanks for the comment Georgi. That sounds like a great question for our advice forum (http://www.creditkarma.com/all/advice). Post it there for other members to answer. Thanks!

    Mike at 5:12 pm on April 7, 2014

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