What Are the Different Ranges of Credit Scores?

Irina Tsymbaliuk
Different Ranges of Credit Scores

If you are thinking about getting a loan or opening a credit card, the first thing you should do is check your credit score and make sure it is sufficient to qualify for the loan you want. And it won’t be enough just to know your scores—you need to be aware of the credit score ranges that lenders rely on when deciding whether to approve a loan to a potential borrower.

Fortunately, if you find that your score is subpar, you can improve it. However, the main thing you need to know is what factors affect your rating and what range of credit scores you should aim for. And this is what we will talk about today.

So, what is the credit score, what are the different credit scores, and how does it all affect your chances of getting a loan?

FICO Score Ranges

FICO Score Ranges

Although decisions regarding loan approval and loan terms are made based on many factors other than just your rating, determining your score range will tell you whether it is sufficient for the type of loan you are applying for. One of the most common credit ratings is the FICO. Most credit companies use this model to determine the creditworthiness of potential borrowers and make decisions regarding loan approval.

FICO scores are calculated by using data from your credit reports to evaluate your riskiness as a borrower and predict whether you will repay the loan on time and in full. Whether you will be approved for a loan and at what interest rates depends on your credit scores.

So, what are the different credit score ranges according to FICO?

  • Excellent (800–850). This rating demonstrates that the potential borrower is highly desirable, their creditworthiness is high, and any risks of lending them money are minimal.
  • Very Good (740–799). This score is above average and shows lenders that the potential borrower is very reliable and is likely to meet their debt obligations.
  • Good (670–739). This score is average or even slightly above average among borrowers, and most lenders consider this a good rating when assessing creditworthiness.
  • Fair (580–669). This credit rating is below average, but borrowers with these scores can still qualify for loan approval.
  • Poor (300–579). This level of rating is significantly below the average and signals to lenders that the potential borrower may be risky and unreliable.

If we are talking about FICO scores, then the factors that affect your credit score rating chart are distributed as follows: payment history (35%), amounts owed (30%), length of credit history (15%), credit mix (10%), new credit (10%).

VantageScore Ranges

VantageScore Ranges

So, there is more than one credit scoring model and more than one rating range, and although they work similarly, the scores and factors vary and are distributed differently. While the VantageScore model is not as widely used as the FICO score, it is also a good indicator of a potential borrower’s overall financial health.

So, what is the credit score range according to VantageScore?

  • Superprime (781–850). This rating demonstrates that the potential borrower is reliable and low-risk; it is easier for them to obtain a loan and they can expect better conditions.
  • Prime (661–780). This score shows the borrower’s good credit behavior, which makes lenders more likely to approve the loan.
  • Nonprime (601–660). This range is generally the minimum suitable for obtaining a loan; borrowers with these scores are still eligible.
  • Subprime (500–600). This level may signal that borrowers are risky, and lenders may be reluctant to approve them for a loan.
  • Deep Subprime (300–499). This score is considered bad, and borrowers with this rating will find it difficult to get a mortgage or any other loan product.

As for the VantageScore rating, credit score categories are formed based on the following factors: payment history (extremely important), age and type of credit (highly important), percent of credit limit used (highly important), total balances and debt (moderately important), recent credit behavior (less important), available credit (less important).

So, the higher your score is, the higher your chances of getting a loan on good terms are. If you understand that your rating is not sufficient for the type of loan or card you are applying for, then you can increase it because many factors depend directly on you.

How to Improve Your Score

How to Improve Your Score

Here are our best tips and tricks on improving your credit rating before applying for a loan.

  1. Constantly monitor your reports. Check them thoroughly and immediately correct any inaccuracies or errors found.
  2. Engage in financial planning carefully. Set clear deadlines for paying all loan payments and do not violate them.
  3. Avoid late payments on loans. Set up automatic write-offs and make a habit of paying all bills on time and in full.
  4. Try to pay ahead. If possible, pay more than the minimum required amount and reduce your total debt.
  5. Prioritize your loans correctly. Pay off the debt with the highest interest rate first.
  6. Keep your credit utilization ratio at a good level. Your debt-to-total credit limit ratio should not exceed 30%, and it’s even better if you use less than 10% of the total amount.
  7. Keep your old and unused credit accounts open. Having open and active lines of credit has a positive effect on your score.
  8. Don’t apply for multiple credit accounts at the same time. The fewer credit applications you have, the higher your chances of getting approved.

Remember that there is no clear strategy for gaining good credit quickly. The keys to success are to remain patient and practice good credit habits in the long run.

Final Thoughts

A credit rating is an indicator that demonstrates to lenders the creditworthiness and reliability of a potential borrower. And what are credit score ranges? These are factors that directly influence the decision to approve your loan and determine its terms.

It is important to understand that there is no clear score that would guarantee a loan and the best conditions—different lenders have different requirements for borrowers and use different scoring models. The most common scores are FICO and VantageScore, and while they consider almost the same factors, they prioritize them differently. However, the most important thing is that if you find that your credit score is below average, you can increase it by knowing what determines your rating and what steps you need to take to improve it.