The Credit Score Rating Scale Explained

If you've ever check your own credit score, you may have found the scale they use for rating you a bit confusing. There are a bunch of numbers that all have a different meaning. Learning to read your credit score properly means you need to understand the rating scale.

There are a few different things that companies review when they build your credit score. These factors can include the following items:

- Your past payment history

- Whether you pay your bills on time

- How much debt you have outstanding

- How long your credit history is

If you don't have much credit history or you're carrying a lot of debt, your credit score will be lower even if you always make your payments on time.

Recent credit application also affect your score. Applying for credit in several places in a short period of time will lower your score, as will having too much high-interest debt.

As a general rule, a score of 700 or higher is considered good. With a score in this range you should qualify for credit easily and you'll usually receive the lowest interest rate available.

If your score is between 450 and 650, it indicates that your credit needs some work to improve it. At this level you'll likely have a harder time finding a loan or qualifying for a credit card without some type of security. You will also likely be paying a higher interest rate because you are considered a higher risk.

If your score is below 450, your credit is in need of some serious help. At this level you likely won't be able to qualify for a loan or credit card until you pursue some form of credit counseling to improve your score.

If your credit score is needing some help, there are quite a few place to get it. There are many credit counseling services out there that are free to use. They'll help you assess your situation and offer advice as to how you should improve it.

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