Credit Score Range

A credit score is formed based on all records of your credit history. It demonstrates the applicant’s chances of obtaining a loan from a bank with the best APR and funding terms, currently ranging from 36 to 84 month.

Your credit score is calculated from data in your credit report (for example: how much is owed, age of your credit accounts, and payment history). That information is collected by credit reporting agencies and incorporated into your credit report. The three largest agencies are Experian, Equifax, and TransUnion. A credit score ranges from 300 to 850:

Scores from 800 to 850 are considered excellent.
A score in the range of 740-799 is generally considered very good.
A good credit score falls in the range of 670-739.
A fair score lies between 580 and 669 points.
And scores of 579 or below will be considered poor.

But there’s not much difference between an excellent score and a very good score if we talk about the rates and benefits you can get. In other words, don’t stress about reaching 850, especially since scores tend to fluctuate frequently. Most consumers have a credit score between 600 and 750.

A higher score gives creditors more confidence that you will repay future debt as agreed. However, lenders can also set their definition of whether a credit score is good or bad when evaluating consumers for loans. At Indy Auto Man, we make banks fight for your business and strive to get the best auto loan rate for your car financing.

How Is a Credit Score Calculated?

Each lender has different criteria for what is considered a good score range as they are trying to attract different types of borrowers. Lenders may also consider how current events affect a consumer’s credit score and adjust their calculations accordingly. Some lenders create their credit scoring programs, but the most commonly used are the two credit scoring models developed by VantageScore and FICO, where the good range will be 661-780 and 670-739 accordingly.

Why Do the FICO and VantageScore Scores Differ?

The results are snapshots, and the numbers may change each time you check. Your score may vary depending on when the credit bureau or agency provided the credit report data used to create it. Not all lenders send account information to all three agencies, so each credit report is unique.

What Affects My Credit Scores?

Common factors that affect your credit scores can be split into the following categories:

Conscientiousness in fulfilling obligations to creditors – that is, timely repayment of loans.
Loan diversification. Different types of loans have a positive effect on the rating, while too many loans of the same type – vice versa.
Length of credit history. This indicator reflects the experience of the borrower in lending.
The period since the credit history was updated. Later entries have more effect on the rating than old ones.

Information That Won’t Influence Your Credit Score

The following factors won’t influence your credit score:

Race, color, gender, religion, nationality, or marital status. U.S. law prohibits this from being included in credit rating formulas.
Your age.
Salary, profession, position, employer, date of employment. However, lenders may consider this data when making overall approval decisions.
Place of residence.
Soft request. Soft requests are usually initiated by companies that run credit promotions or lenders who regularly review existing credit accounts. Soft requests also happen when you check your credit report or use one of the credit monitoring services. These requests will not affect your credit score.

How to Improve Your Credit Score

To improve your credit score, focus on the main factors that affect it. The basic steps to take are very simple.

Make minimum payments and pay all your debts on time. Even one delinquency can ruin your credit score and stay on your report for up to 7 years. If you think you may be missing a payment, contact the creditors to see if they can work with you or provide you with options for difficult situations.
Keep your credit card balance low. Credit usage is an important scoring factor that compares your current balance to your line of credit on a revolving account. Low credit usage helps you get to the good credit score range.
Open an account that will be reported to the credit bureaus. If you don’t have many credit accounts, make sure that the accounts you open are added to your credit report. These can be installment accounts such as student, car, home, or personal loans, or revolving accounts such as credit cards.
Apply for a loan only when you are going to take it. When you apply for a new account, it can be difficult to track down and your credit score may suffer a little. The impact is often small, but applying for various types of loans within a short time can cause your score to drop even further.
Take advantage of the free credit repair service offered by Indy Auto Man and performed by Fierce Marketing: www.fiercecredit.com/indy

Other factors may also affect your score. For example, the older the average age of your account the better your score. However, it is often a matter of waiting rather than doing anything.

Our dealership is working with 20+ credit unions and financial corporations to provide you with best auto loan terms, even if your credit score is not high.

Get in touch with the Indy Auto Man representative in Indianapolis just now to check your credit potential and get the best financing deal for a car purchase.