good credit score

A good credit score: What dilemma does the credit bureaus put you in ?

Credit score is one of the crucial things to enjoy a whole lot of privileges offered to every consumer. However, it has to be a good one or else one may not qualify for most of them.

A good credit score is said to be different from a bad one in terms of thousands of dollars. This may impact your ability to apply and qualify for fresh lines of credit like a student loan or credit card.


Good credit score - The bone of contention

Although there is a sheer obstruction of the flow of useful information, yet there exists some guidelines as to what comprises a good credit score.

Speaking about the FICO (Fair Isaac Corporation) score, this popular credit scoring model has a range of 300-800 points, where 300 is considered to be an abominable one and 850 as excellent.

There are many perks of having a commendable credit score (be it good or excellent). For instance, it can help you to get lowest possible annual percentage rates (APR) on credit cards or any other lines of credit.

FICO: The good samaritan?


FICO is a credit scoring model that leads in terms of acceptance and usage by the organizations or individuals out of various others, currently available in the market. In fact, to many people a FICO score is simply synonymous with credit score and nothing more than that.

As per Experian (one amongst the three other major credit bureaus in the country apart from Equifax and TransUnion), any good credit management is suppose to have a FICO score of 700 or above. Almost 60 percent of all the consumers have a FICO score that is well above 700.

A lot of lenders, as a result, will use this score to evaluate your creditworthiness and depending upon his or her analysis will provide you with affordable or steep interest rates as well as conducive/tough lending terms.

Even in the recent past, you could have qualified for the best interest rates and loan terms available in the market with the help of a FICO score of 720. However, with the tightening of the noose around the creditors and the implementation of stringent lending rules that has undergone a sea change. Hence, now the best rate and terms on fresh credit is reserved only for those who’ve got a FICO score in the range of 750-760.


FICO: The prodigal son?

In the first place, different credit bureaus may have different credit scoring models. They collect different financial (credit) data to document and file them as your credit history. This is because of the possibility of committing mistakes, but then, even the creditors aren’t under any obligation to report all your credit information to any of these bureaus, forget about to all three of them.

In case, all the three major credit bureaus used a single platform (i.e., reporting structure and scoring system) to calculate the credit score of the consumers (something these agencies unfortunately don’t), still they are very likely to come up with different outcome.

To make the entire process of credit score calculation all the more elusive, these agencies use different scoring as well as data translations systems. As already known, FICO was the first ever credit scoring model developed in the country during the early 1950s by the Fair Isaac Corporation.

So, out of all the other credit scoring models, FICO score is the most widely used one. All of the credit bureaus somehow uses this FICO scoring model but makes it confusing for the others to demystify by giving their own names like Experian/Fair Isaac Risk Model of Experian, EMPIRICA of TransUnion and BEACON of Equifax.

Therefore, considering all the differences and variations in the functioning of the credit bureaus, it is the creditors who actually gets to determine what according to them is a good credit score. Learn more on how to consolidate your credit card debt problem from DebtConsolidationCare

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A good credit score: What dilemma does the credit bureaus put you in ?

Credit score is one of the crucial things to enjoy a whole lot of privileges offered to every consumer. However, it has to be a good one or else one may not qualify for most of them.

A good credit score is said to be different from a bad one in terms of thousands of dollars. This may impact your ability to apply and qualify for fresh lines of credit like a student loan or credit card.


Good credit score - The bone of contention

Although there is a sheer obstruction of the flow of useful information, yet there exists some guidelines as to what comprises a good credit score.

Speaking about the FICO (Fair Isaac Corporation) score, this popular credit scoring model has a range of 300-800 points, where 300 is considered to be an abominable one and 850 as excellent.

There are many perks of having a commendable credit score (be it good or excellent). For instance, it can help you to get lowest possible annual percentage rates (APR) on credit cards or any other lines of credit.

FICO: The good samaritan?


FICO is a credit scoring model that leads in terms of acceptance and usage by the organizations or individuals out of various others, currently available in the market. In fact, to many people a FICO score is simply synonymous with credit score and nothing more than that.

As per Experian (one amongst the three other major credit bureaus in the country apart from Equifax and TransUnion), any good credit management is suppose to have a FICO score of 700 or above. Almost 60 percent of all the consumers have a FICO score that is well above 700.

A lot of lenders, as a result, will use this score to evaluate your creditworthiness and depending upon his or her analysis will provide you with affordable or steep interest rates as well as conducive/tough lending terms.

Even in the recent past, you could have qualified for the best interest rates and loan terms available in the market with the help of a FICO score of 720. However, with the tightening of the noose around the creditors and the implementation of stringent lending rules that has undergone a sea change. Hence, now the best rate and terms on fresh credit is reserved only for those who’ve got a FICO score in the range of 750-760.


FICO: The prodigal son?

In the first place, different credit bureaus may have different credit scoring models. They collect different financial (credit) data to document and file them as your credit history. This is because of the possibility of committing mistakes, but then, even the creditors aren’t under any obligation to report all your credit information to any of these bureaus, forget about to all three of them.

In case, all the three major credit bureaus used a single platform (i.e., reporting structure and scoring system) to calculate the credit score of the consumers (something these agencies unfortunately don’t), still they are very likely to come up with different outcome.

To make the entire process of credit score calculation all the more elusive, these agencies use different scoring as well as data translations systems. As already known, FICO was the first ever credit scoring model developed in the country during the early 1950s by the Fair Isaac Corporation.

So, out of all the other credit scoring models, FICO score is the most widely used one. All of the credit bureaus somehow uses this FICO scoring model but makes it confusing for the others to demystify by giving their own names like Experian/Fair Isaac Risk Model of Experian, EMPIRICA of TransUnion and BEACON of Equifax.

Therefore, considering all the differences and variations in the functioning of the credit bureaus, it is the creditors who actually gets to determine what according to them is a good credit score. Learn more on how to consolidate your credit card debt problem from DebtConsolidationCare

Back to Articles