My credit Score is Only 650, What Does This Mean to the credit Card Companies?

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The prestige score (Fico) ranges from 300 to 850. The cutoff for most lenders is 620. Whatever lower than this is determined high risk or subprime. If your score is at this range or below, then you are determined a bad risk and will most likely be denied a loan. On the other hand, the higher that your score is, the more likely you are to be determined a good risk by lenders. A article by the buyer Federation of American estimated that by raising their prestige scores by an midpoint of only 30 points, consumers could save approximately billions dollars per year. That sounds very plausible indeed.

Now to raise a prestige score from 620 to 650 would be determined good, but getting into the 700's will take some work. That is not to say it can't be done, but more effort is needed to make that kind of a leap. Here is the breakdown of how a prestige score is tallied:

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1) payment History - 35%

My credit Score is Only 650, What Does This Mean to the credit Card Companies?

2) Amounts Owed - 30%

3) length of prestige History - 15%

4) New prestige - 10%

5) Types of prestige Used - 10%

There are some straightforward things to be done here to get that prestige score on an upward trend. First, pay the bill on time. Use online bill pay if possible, but make sure that you pay 4 - 5 days ahead. This will ensure a timely payment. Next, try to keep the whole owed less than 50% of the prestige cards allowance. Also, get rid of any inactive cards or use them to make small purchases and pay them off on time. Each puny thing that you do affects your prestige score, but by manufacture small adjustments in how you purchase items and pay bills, it adds up quickly.

Remember, you don't need a excellent score to get the best interest rate. Typically a score between 720 and 850 will qualify you for the best rate. So if you are at the 620 mark, only 100 further score points will perform this goal. That is easily attainable if you get on a program and stick to it. Your hereafter is what you make of it.

My credit Score is Only 650, What Does This Mean to the credit Card Companies?