Bad Credit Boot Camp

An OppLoans Guide to Understanding Your Credit, Credit Report, and Credit Score.


Chapter 1. Checking Your Credit Score

A credit score is essentially a measure of your financial responsibility. Credit scores take the information from your credit report and use it to calculate a three-digit number, ranging from 300 to 850. The higher your score, the better your credit.

A credit score is a lot easier to understand and digest than digging through page after page of a long, detailed credit report showing all your most important financial transactions, payments and legal information. Your credit score sums up all of that into a neat, three-digit number, which is what most employers, landlords and lenders will look at to assess your creditworthiness.

There are a couple different ways of calculating a credit score, but the FICO score is generally considered the most reliable and has become the most popular credit score calculator in the financial industry.3

720 to 850680 to 850630 to 679550 to 629300 to 549

As we mentioned earlier, FICO scores range from 300-850. Scores below 549 are considered “poor”, scores from 550-629 are considered “subprime,” scores from 630-679 are considered “fair,” scores from 680-850 are considered “good,” and anything above 720 is considered “great”.

The average American has a FICO credit score of 695, which is considered “Fair” credit, and the average American household carries $16,435 in credit card debt.4

The average American has a FICO credit score of 695, and the average American carries $16,435 in credit card debt.

According to a report from major U.S. lender Sallie Mae, only 20 percent of American consumers have a credit score of above 800.6  Most lenders are willing to loan to anyone with a score of 670 or above, and some will loan to people with a score as low as 580. Scores lower than 580 are considered “subprime,” and most lenders see the 20 percent of Americans who fall into this category as high-risk borrowers, who may not be able to pay their debts.

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