Your credit score, commonly referred to as your FICO score, is a numerical measurement of your financial history which ranges from 300 to 850. Banks and lenders use the FICO rating system to judge the risk potential clients present when receiving a loan. The higher you are able to maintain your score, the less risk of defaulting you present to lenders and the lower your interest rates will be.
What is the Average FICO Score?
The average United States FICO score is 692, which falls into the range of a B+ grade credit score. Whether your score is higher or lower than average is determined by the information found in your credit report. Your credit report is a series of entries based on your financial activities. Any live score time you make a bill payment, take out a loan, or don’t pay a debt that you owe, it is recorded on your credit report and consequently results in either the rise or fall of your FICO score.
The majority of Americans have a score somewhere within the range of 650 and 750, which is considered to be good credit and will result in lower interest rates and less terms on loans and leases. If you find yourself with a score below 650 you should start taking steps towards improving your score. There is a wealth of information available online concerning credit score improvement, so make sure you put in the time to learn as much as possible. It really is worth it.
Improve Your Credit – Check Your FICO Score!
Surprisingly most Americans don’t know their FICO credit rating! This is surprising because it takes less than 5 minutes to find out your score online and it is absolutely free. Thanks to federal laws which were passed in 2003, you are legally entitled to your FICO score and credit report once a year. So check your score and review your credit report for any errors or outdated entries, your interest rates will thank you.