Some credit card holders are not aware much about the other features related to their credit cards. What they know about their cards are mostly the very basic things. These plastic cards are swiped every time they make a credit purchase of any product or service and the prices will be charged to their bill, plus interest. They have heard of the term “credit score” but don’t really know what it means. Experts from all over the net have laid out the basics of credit score.
So what is a “credit score”? CreditCard.com defines this tem as a 3 digit number that summarizes how well a person has handled debt. “It’s a history of your borrowing performance,” Jeremy Simons, a correspondent of the website said.
The most common credit score in United States is the FICO score. The score system name was coined from its creator, the Fair Isaac Corporation also known as FICO. The score is calculated through formulas that are kept secret to the public.
The score system has a range of 300 to 850. The higher the score, the better the lender trusts the holder. The lesser the score, the lesser the lenders trust the holder. This means that when the customer has a very high credit score, the lender will be having a very small risk of default. A bad or low credit score makes the lender exposed to a high rate of default risk.
Other credit scores, such as Vantage Score used by the three major bureaus (Equifax, Experian and TransUnion) uses the range 501 – 990. There are other non-FICO scores that has a very similar system as FICO are sometimes known as “FAKO Scores”
The question is, does anyone has an 850 score? Ilyce Glink, an expert of RealEstateTips.net, asks another credit card expert. “I have never seen an 850. I don’t know how to get an 850,” Steve Ely, President of Equifax Personal Information Solutions, said. “I think less than 1% of the population has more than 800.”
The score of 850 is a perfect score that seems too ideal for anyone to meet. A score of 800 is a very pretty good score. “You’re in an elite crowd if you get 800.” “If you have a 720 or higher, you’re always going to get prime rates. You can get the best rates available. If you get an 800 or higher you can get the best rates possible from the best lenders possible. So that’s an excellent credit score,” Ely added.
