How to Translate a Credit Score

Credit reports provide potential lenders with information about the risk associated with lending to a particular borrower. Checking your credit report is important because it verifies the information available to creditors. A free credit report is available once a year from three different companies: Equifax, Transunion, and Experion. The score ranges from 300 - 950 and is based on several factors. Each company provides different information but the basic layout is the same. With a quick overview, it is possible to translate this report into useful information.

Instructions

1

Order a credit report. A quick reference for ordering is listed below. The report includes the information from each of the three companies listed above. The credit score is listed as a number between 300 and 950. The scores are stratified into three groups: Prime, sub-prime and shafted.

2

Prime is any score above 680. A prime score means you won't have any problems getting a good interest rate on a loan or credit card.

3

Sub-prime is between 560 and 680 and means you will have a much higher interest rate on a loan or credit card.

4

Shafted is considered any score below 580. A credit score lower than this has several consequences. You can still get a credit card but you will have a high interest rate of 22 to 23 percent and you may have to pay fees and a down-payment. Most mortgages and loans will be unavailable with a shafted credit score. A low score can potentially increase your insurance rates.