Your Credit Score Is Not Just Numbers: What Your Credit Score Numbers Mean?

Please be aware that your credit score is not just a bunch of numbers. They have meaning. Do you know what your credit score numbers mean? Your credit score a grade of how good you are with credit and debt. Your number gives businesses a view into how responsible you are with money.

What’s in your credit score and what do those numbers mean?

There are eight credit score models:  FICO credit score model, the Vantage credit score model, the TransRisk credit score model, the Experian National Equivalancy credit score model, the Credit Xpert credit score Model, the CE credit score model and a credit score for insurance. The two most popular and widely known credit score systems is FICO and Vantage.

Both Fico and Vantage have a credit score range of 350 to 850.

 

My credit score FICO credit score and Vantage credit score numbers range between 805 to 809.  Based upon my credit score, I have excellent credit. Additionally, because I have excellent credit I have a low interest rate on my mortgage, credit cards, car insurance, and I never have a problem with getting a cell phone. I have an .09% interest rate on my 2015 Honda Accord.

A financial contributor to the Washington Post, Michelle Singletary, recently wrote an article that she has an 850 credit score. While she details how she was able to achieve this credit score, I am still befuddled. http://us.pressfrom.com/news/offbeat/-160859-how-i-got-a-perfect-850-credit-score/

Mrs. Singletary is one of 1.5% of U.S. consumers who have a perfect credit score. Mrs. Singletary attributes her perfect credit score to having a perfect mix of 16 accounts which include mortgages, auto loans, etc and credit cards; having her oldest account for 25 years; has not had any recent inquires on her credit and how much credit she uses is low.

What Makes Up Your Credit Score

Your credit score is determined by your payment history and accounts for 35% of your score; your credit utilization which means how much of your credit limit are you using. You should not be higher than 30% in this category and this accounts for 30% of your credit score.  Furthermore, while the length of time you have had credit is only 15%, the longer you have had some kind of credit the better. Lastly, your what types of credit you have and whether you have new credit accounts for 10% each of your credit score.

How I Maintained a Good to Great Credit Score

I don’t remember ever having a credit score less than 700. Despite all the debt I was in, all the times I had to rely on my bank’s overdraft protection to save me, I always paid my bills on time. Paying my bills on time accounted for 35% of my score. Unfortunately, having a good mix of credit was never a problem for me. I had a mixture of debt from everything and everywhere. As I paid off my debt and kept what I had as debt low, my credit utilization stayed below 30%. In fact, it’s generally in the teens, about 17%.

If you are curious as to where you may stand, please look at this website called Moneytips. https://www.moneytips.com/consumer-tools-marketing#credit-manager

Your credit scores are NOT just a bunch of numbers. They are real. Even if you don’t care about your score, care about the debt that may or may not be reflected by your credit score. Be responsible with your credit and maintain a low debt to no debt life.