OK, you’ve done your homework and obtained your credit report and FICO credit scores from the three major credit bureaus (Equifax, Experian, and TransUnion). You have all the data on your credit history and the three-digit credit score numbers. So what does it all mean? Let’s discuss how creditors view your credit scores so you can determine if there is a need to learn how to improve credit scores.

FICO credit scores range from 300 to 850, with the higher number indicating a better score. Creditors will look at all three scores and will generally use the middle score as your representative score. For example, if your credit scores are:

• Equifax: 658
• Experian: 672
• TransUnion: 683

then 672 will be your representative score in which a creditor will base a loan decision and determine the terms (interest rate). Credit scores may vary by credit bureau, in part because not all of your credit information is reported to each and every credit bureau.

Is My Credit Score Bad? Good? What’s The Deal? Let’s break it down. If your credit score is higher than 750, then you’re in prime territory and your credit score is considered top notch. You should not have a problem qualifying on credit alone, and you will likely be offered the very best rates. With these scores, you do not have to worry about learning how to improve credit scores.

Credit scores of 720 to 749 are also considered excellent credit scores with favorable loan rates and consideration from creditors. A credit score of 700 to 719 is considered a very good credit score. You will still be considered for most loans based on credit but may not get the very best rates. A tweak here and there on your part may get your scores above the 720 threshold.

Credit scores of 680 to 699 are good credit scores but are not the ideal scores we had in the 700+ range. You may still qualify for loans but the rates offered may be slightly higher. Credit scores of 660 to 679 are fair credit scores, which may exclude you from the riskiest of loans, and interest rates may be even higher yet. A marginal credit score of 620 to 659 is on the low end of what a creditor would consider acceptable credit. A consumer may qualify on some types of loans but may not receive ideal interest rates. A consumer may benefit by learning ways to improve credit scores to try and get into the 700+ club.

Once the credit score goes below 620, consumers are in less than favorable territory, as this is considered subprime. At this point, consumers should learn how to improve credit scores in order to get back into prime territory. A bad credit score between 580 to 619 may exclude you from most financing. However, there may be deals available at very high interest rates. Consumers will need to focus on learning how to improve credit scores to get above 620 and better their chances for loan consideration and terms.

A credit score below 580 is considered poor credit, and there are only a few types of credit programs a consumer could qualify for. To try to get out of this situation, a consumer will definitely need to follow as many ways to improve credit scores as necessary.

In A Nutshell So there you have it. Unless you already have a very high credit score, there are always ways to learn how to improve credit scores to better your chances for loan consideration and terms. Credit score improvement takes time and dedication, but the payoff in the long run should be less stress and hassle when applying for credit, and it should also save you money!