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A Guide to Credit Score Scale

“Where you fall on the credit score scale is important. Let this guide help you. Check it out now!”

All About Credit Score Scale

Our financial lives are dictated with terms such as credit score, credit ratings, credit history and so on. These are the terms which often crop up when you are applying for loans or credit cards. No money lender or a finance institution approves a loan without reviewing the applicant’s credit scores and credit history. Although, most people have a vague idea regarding what are credit scores, most of them are unaware about the credit score scale.

Credit Score Scale Guide
Credit score is a statistical technique of determining the probability of an individual repaying his debt within a specific period of time, by evaluating and analyzing his previous credit history. In short, it is your creditworthiness represented by a number. The evaluation and analyzing work is done by three credit bureaus namely, TransUnion, Experian and Equifax. These bureaus have their own parameters and mathematical formulas for deriving a person’s credit score. The software program that uses the mathematical formulas to find credit score is devised by Fair Isaac Corporation (FICO), hence the score is also called FICO score. The scores derived by each of these bureaus may vary slightly, owing to the differences in the information in their databases.

Typically, following parameters are taken into consideration while deriving a person’s credit score. A fixed weightage is assigned to each of these parameters, which is as follows:
Payment history (35%)
Outstanding current debts (30%)
Length of credit history (15%)
Types of credit accounts owned (10%)
New credit applications (10%)
Credit Score Scale Chart

The FICO scores are expressed in a numerical range of 300 to 850.

The credit scores between 760 to 849 are considered as least risky with a very high creditworthiness. The credit score of 850, which is an ideal credit score is the highest score possible in this range. People with excellent credit scores are entitled to fastest approvals and enjoy lowest possible interest rates.

The next best category is ‘great’ with credit scores in the range of 700 to 759. People in this credit score range also enjoy almost all the privileges as those with excellent ratings.

Good credit score range is a category in which most Americans falls. Credit score range of 660 to 699 is not a problem while seeking loan approvals. However, you may not get the best possible interest rates, enjoyed by the above two classes.

Credit score range of 620 to 659 is considered as low to medium risk. Although getting loans may not be an issue, getting them at affordable interest rates certainly is. People with fair or average credit scores should look for ways to improve credit scores so that they too can enjoy good interest rates.

You may have to run from pillar to post to obtain a loan, as money lenders regard poor or bad credit scores as high risk. Even if you manage to obtain a loan, you will have a tough time keeping up with the payments, owing to very high interest rates.

Very Poor
People who have very poor credit scores below 580 should consider credit repair before they approach a loan institution. Consistent efforts towards credit improvement may eventually help you attain a better credit score range. More at Credit Score Scale Guide

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Credit Score: All You Need to Know

“Confused what Credit Score is? We’ll help you answer that question and more. Check this out now!”

All About Credit Score

Your credit score determines your eligibility for credit cards, home loans, car loans, student loans, apartment rentals and even certain job positions. It can mean the difference between a reasonable or exorbitant interest rate, and the difference between an affordable or excruciating insurance rate. There are few, if any, 3-digit numbers that hold so much power.

Where can I find my credit score?
Once a year, federal law entitles you to a free credit report from each of the 3 major credit bureaus. If denied credit, you’re eligible for an additional report. To view your free credit report, simply go to AnnualCreditReport.com.

Unfortunately, getting a free credit score is a little more difficult and a bit more costly. You can obtain your credit score from a number of websites, but they all demand a membership fee. However, the fee generally comes with a grace period in which you can avoid paying if you cancel your account.

What is a credit score? And how is it different from a credit report?
Your credit score—also known as a FICO score—is a 3-digit number that summarizes your creditworthiness. Ranging from 300 (worst) to 850 (best), your credit score tells lenders how likely you are to pay back loans. Your primary score is determined by Fair Isaac Corporation (hence “FICO”) and is considered the most accurate assessment. The 3 major credit bureaus (Equifax, Experian and TransUnion) also issue credit scores that vary slightly from bureau to bureau.

A credit report is an in-depth analysis of your creditworthiness issued by the credit bureaus, a detailed examination of the components that comprise your credit score. You’re entitled to a free report from each of the 3 bureaus once a year—twice if you’re rejected for credit. You should check your credit report regularly and report discrepancies immediately. Mistakes in credit reports happen more often than you might think and can have adverse effects on your credit score. You can view your free credit report (like really, truly, totally, 100% free) at AnnualCreditReport.com.

How is my credit score calculated?
Your credit score is contingent on a number of factors that can be summarized in 5 categories:

  • Payment History (35% of your FICO score): Making payments boosts your score. Missing payments destroys it. Recent history has a greater impact.
  • Amounts Owed (30% of your FICO score): Debt can hurt your score, though installment loans (like student loans) are actually beneficial if you keep up with payments. Your debt-to-credit-limit ratio is also important. Letting debt come too near your spending limit reflects poorly on your creditworthiness.
  • Length of Credit History (15% of your FICO score): The age of your accounts is taken into consideration. Old accounts earn more trust, while new accounts are regarded with suspicion.
  • New Credit (10% of your FICO score): This category looks at recent credit acquisitions and inquiries into your credit score. Too many new credit lines or too many inquiries in a short period of time look bad.
  • Types of credit used (10% of your FICO score): Different kinds of credit impact your score in different ways. The best way to score points here is to diversify your credit types.

How do I raise my credit score?
Establishing credit is easier than you might think. A good credit score starts with smart spending. More at What’s My Credit Score?

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Budgeting for Dummies – Learn These Essential Steps to Help You Manage Your Finances

“This article will discuss essential steps and tips on how you can manage your finances better. Budgeting for dummies you say? Read on and find out!”


budgeting for dummies

Learn and Be an Expert in Managing Your Finance

Learning how to budget is essential to becoming financially healthy. Many people are intimidated by budgeting simply because they have never learned how to budget. Budgeting is simple. It’s a process where you write down what you make each month, what you spend each month and what’s leftover (or overspent) each month.

The whole goal of a budget is to tell your money where to go each month. If you haven’t been budgeting or just simply don’t know how to budget yet, you finances are likely getting out of hand. There is hope in learning how to budget your money. Let’s dig in to the five steps of learning how to budget:

  1. How to Budget, Step 1 – Track Your Income
  2. How to Budget, Step 2 – Track Your Expenses
  3. How to Budget, Step 3 – Estimate How Much You Will Spend in the Next Month in Each Budget Category
  4. How to Budget, Step 4 – Give Your New Budget a Try For a Month
  5. How to Budget, Step 5 – Keep Working at it and You’ll See a Difference

How to Budget, Step 1 – Track Your Income

Yes, you will need to track everything. Do you know how much you make each month? No is not an acceptable answer. Get out those pay stubs, log into your company’s online pay stub system or just look at your bank statement. Note: If you’re income is irregular, you should do additional research on how to budget with an irregular income. There are some great articles out there. For those of you who get regular paychecks, make sure to get your numbers and do the basic calculations on what your income is each month. Once you have your income number totaled, write it down at the top of a blank sheet of paper.

How to Budget, Step 2 – Track Your Expenses

This is the hardest part of budgeting. Learning how to budget won’t do you any good if you’re not tracking your expenses. It’s important to track everything you spend each month because then you can make educated guesses on how much you think you’ll spend each month. The goal of making a budget is to to learn how to estimate your expenses and allocate a specific amount of money each month to certain categories.

A typical budget is broken down by categories of expenses. Some common categories of expenses are:

  • Mortgage and Rent
  • Bills & Utilities
  • Loans and Payments
  • Shopping (clothing, gifts, toys)
  • Giving (church donations, non-profits)
  • Cable TV
  • Cell Phone
  • Internet
  • Gasoline
  • Insurance

To successfully learn how to budget, you’ll need to get a feel for how to categorize your expenses. Mint.combudgeting for dummies does a great job of breaking your expenses into categories, In fact, Mint.combudgeting for dummies has a budgeting tool set which can greatly speed up the process of learning how to budget and get your first budget going. I would highly recommend getting started budgeting with Mint.combudgeting for dummies.

If you decide not to use an electronic system to learn how to budget, an old fashion paper and pencil will definitely do the trick. Write down your budget categories, which are categorized expense types, down below your income on your piece of paper. There could be anywhere from 10 to 50 budget categories. Try to lump them into around 15 or 20 categories as this will make it simpler in figuring out how to budget.

How to Budget, Step 3 – Estimate How Much You Will Spend in the Next Month in Each Budget Category

Once you have your categories decided upon. Try to estimate how much you will spend during the next month in each category. If you haven’t been tracking your expenses up until this point, you’ll likely be WAY off, but that’s okay. If you have been tracking, you may still want to estimate higher than you initially think for each category. When I was first learning how to budget, I tried cutting down many of my category allocations because I thought, “Oh, I don’t need to spend all that”, but I was wrong. Just allocate a number that you regularly spend. Don’t try to short change yourself and make it hard on you to hit the numbers. Budgeting should be a real number, not a fake one that’s too low to realistically hit.

How to Budget, Step 4 – Give Your New Budget a Try For a Month

During and after the first month of learning how to budget, you will likely get frustrated. You likely won’t stay below your estimates. We usually spend way more than we think we do. We just never have tracked how much all that eating out costs us each month. So, if you’re shocked on how much you spend in some categories after learning how to budget, don’t worry. It will take a few months to get this stuff right. For the next couple of months, try tweaking your budget in the direction of over or underspending and see how that goes.

How to Budget, Step 5 – Keep Working at it and You’ll See a Difference

Budgeting is hard at first when you’re first getting started, but after you learn how to budget effectively, it can start getting fun. The results of telling your money where to go each month and being in control of your spending can be huge. I learned how to budget only a couple of years ago and have since gotten out of debt, built an emergency fund of 6 month of living expenses and have saved a significant amount of money that I plan to use either toward a home purchase or toward an investment portfolio over the next few years. I’m definitely glad I took the time to learn how to budget and hope you will too….More at Budgeting for DummiesHow To Make A Budget- A Budgeting for Dummies Article Solution

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