Breakdown of Credit Scores

Once you have received your credit report you may be wondering what, exactly, your score means and how it reflects upon you as a consumer. While the company that produces the scores, the Fair Isaac Corporation, FICO, does not provide exact numbers to break down the credit score ranges, financial experts provide guidelines for the ranges you should aim for to obtain the best interest rates.

Excellent Credit

Those with very good to excellent credit will get the best interest rates on credit cards and loans, and will have an easier time qualifying on credit checks for rentals and potential jobs. According to, Michael Feldman, co-founder of the website Mortgage IT, very good credit is qualified as being in the mid-700s and above. The Fair Isaacs Corporation credit scoring model runs up to 850; therefore, scores ranging between 750 and 850 are generally considered very good.

Acceptable to Good Credit

Most people fall into the "good" credit range. According to a Bankrate article by Steve Bucci entitled, "Grading Your FICO Score," 40 percent of people fall into the middle ranges: 20 percent of the population earn a score between 620 and 690, and another 20 percent receive a score between 690 and 745. Generally, those earning a score above 650 will receive the lowest interest rates, with further reductions for higher scores.

Poor Credit

Those with credit scores from 620 and below may find themselves stuck with high interest rates, as lenders view them as a high credit risk. A low credit score indicates that you've had trouble repaying your debt in the past, and lenders will be weary of your ability to repay any money they loan you. Financial experts recommend boosting your score by paying your creditors on time, lowering your balances to no more than 40 percent of your credit limit, and keeping your oldest accounts open.

Calculating Your Score

According to Smart Money writer AnnaMaria Andriotis, five factors determine your credit score. Timeliness of payments accounts for 35 percent of your credit score. Your credit utilization ratio, or how much debt you have in relationship to the amount of credit available to you, makes up 30 percent of your score. The length of your credit history is 15 percent, with new credit and the diversity of your credit making up 10 percent each.