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There is no such standard system that can specify a good credit score. Different financial bodies or groups set a standard of their own to use this indicator to offer loan to the people in need of financial help. Normally a 700 FICO credit score is considered good whereas the range starts from 300 and ends at 850. While searching online, you can observe different credit score criteria as a pre-qualification to get a loan. This statistical number determines the loan amount, rate of interest and the length of loan you are eligible for.
- Image by Casey Serin via Flickr
A good credit score indicates a good financial status and credibility. There is a particular mathematical formula that derives the number analyzing your credit report with the help of it. This score reflects and predicts the nature of your future repayments. You must clearly understand that your credit score will be different at different credit scoring models. The reason is that the percentage factors and parameters are different at different models.
Fair Isaac Corporation (FICO) came as a savior to set some standardization in generating credit score. FICO is a California based organization that developed the first credit score with the help of a specific standard scales used for different parameters. The system has been accepted by all leading financial institutions.
There are three major credit organizations – Trans Union, Experian, and Equifax who use their independent version of FICO scoring system. It has been revealed in a recent study that forty five percent of the American people have a good credit score on an individual basis. Their scores lie somewhere between 700 and 800. It is truly a kind of freedom and honored privilege to enjoy the benefit of a good credit score.
Tags: Credit score, Equifax, Experian, Fair Isaac Corporation, FICO, Loan, TransUnion