Your FICO credit score is a numerical score derived from your financial activity over the life of your credit history. FICO credit scores change frequently with new activity in your credit report. It can range from a score of 300 to 850, with 850 considered excellent and 300 considered very bad credit. Your FICO score is the number banks and other financial institutions use to decide whether they will loan you money or not. The better your FICO credit score, the more likely you will get the loan.
You should know how your FICO score affects your financial health. The numerical score for your FICO credit score is based on your credit history and the information contained in your credit report. Your credit report keeps records of all the bills you've ever paid and if you paid them in a timely manner. Banks and other financial institutions decide if you will be a risk to loan money to from your FICO score. The higher your score, means that you will be less of a risk, and the more likely you will be to repay the loan.
FICO Credit Score Ranges:
300-499 Very Bad Credit
500-580 Bad Credit
581-619 Poor Credit
620-679 Average Credit
680-699 Good Credit
700-850 Excellent Credit
You will find that your FICO score is important to your finances because it proves to your lenders how you handle your finances. If you have a low credit score, you will find it hard to get a loan. If your credit score is high, you will be able to pick and choose who you borrow from in order to get the best deals available.
Make it a priority to know what's in your credit report and what your FICO credit score is. If you let your credit score drop, it could take many years to get it back on track, and could also lead to financial disasters.