Many basic financial tasks are made more difficult by bad credit, whether you're obtaining a new credit card or getting your first mortgage.
You could end up with lesser credit limits and higher interest rates, and your negative credit could even keep you from getting that new job.
FICO and VantageScore are popular credit scores. Both scoring algorithms use a 300-850 credit spectrum, but their ranges differ.
Scores in the FICO scoring methodology range from 300 to 850. This figure shows a borrower's likelihood of repaying a debt.
If your credit score falls between 300 to 579, it is considered bad, and lenders may consider you a risk.
The median FICO score in 2021 was 716, putting them firmly in the excellent category. If your credit score is less than 670, your credit is either poor or fair.
VantageScore is yet another credit scoring model that uses information from consumer credit reports to calculate a credit score.
According to the VantageScore model, a credit score between 300 to 660 is considered poor, while scores below 500 are regarded very poor.
In 2021, the median VantageScore was 698, which is within Vantage's "excellent credit" category.
You may keep a good credit score if you pay your bills on time, don't carry a large load, and don't apply for too much credit all at once.