A FICO score is between 300 and 850, exhibiting a left-skewed distribution with 60% of scores near the right between 650 and 799. According to FICO, the median score is 723. The performance of the scores is monitored and the scores are periodically aligned across scorecards within each scoring model, as well as across the three credit bureaus, so that the score represents the same credit risk to lenders regardless of its source.
Each individual actually has three credit scores for the FICO scoring model because the three national credit bureaus, Experian, Equifax and TransUnion, each has its own database. Consequently, data about an individual consumer can vary from bureau to bureau. Studies point out that people with higher scores have fewer claims. Studies also indicate that the majority of insureds pay less in insurance through the use of scores.
Credit scores may be a little confusing to understand. Even within a FICO score there are additional ratings that may vary from lender to lender.
FICO Credit Score Valuation Letter Grades
720 + excellent A-credit
650 + good B-credit
575 + average C-credit
below 575 poor D-credit
However, as previously stated, credit ratings may vary from lender to lender. Additionally, those A, B, C, D ratings can become A+, A-, etc. and what for one lender can be a B- for another could be a C+.
Bad Credit Ratings:
Furthermore, A-credit, B-credit, C-credit, and D-credit will be used by subprime lenders and often refer to borrowers with FICO credit scores below 630. In that case A-credit applies to people with 580+, B-credit will be 560+, C-credit will be 530+, and D-credit will be 500+.
VantageScore Credit Rating:
VantageScore was introduced by the three major credit-reporting agencies in 2006. This credit score model ranges from 501 to 990 and also assigns letters from A to F to the different credit score ranges.
VantageScore Valuation Letter Grades
901-990 A-credit
801-900 B-credit
701-800 C-credit
601-700 D-credit
501-600 F-credit
No comments:
Post a Comment