Credit Report Scores And How Do Lenders Use Them

Credit Report Scores lenders receive in credit reports on consumers are often the only piece of information lenders have when they decide whether or not to approve consumers for loans and credit cards. Maintaining a healthy credit score is vital for consumers who may want to apply for a home loan, automobile financing or department store credit card. While a home loan is a secured form of credit guaranteed by the property itself, a credit card is an unsecured debt that is only guaranteed by the consumer's promise to pay back the loan. Credit Report Scores, which appear on the credit report, give lenders an indication of how much of a risk it is to extend credit to a consumer. Credit Report Scores are calculated based on the consumer's credit history.  

What are the ranges for Credit Report Scores?

500 to 559: The lowest rating a consumer can have on their credit report. The chances are slim that a lender will take a risk on the consumer and approve a loan or extend a line of credit. If a consumer in this category is approved for a loan, the terms are generally strict and interest rates are usually very high.

560 to 619: This a low credit score. Consumers with Credit Report Scores in this range may have an increased chance of loan and credit card approvals; however, the consumer still faces the possibility of strict terms and high interest rates.

620 to 659: With this credit score, the probability of a consumer getting approved for a loan or credit card improve; however, the interest rate may not be the best that is available.

660 to 669: Consumers with a Credit Report Scores in this range may not have any trouble obtaining low interest financing on loans and credit cards.

700 to 759: Credit card and loan offers generally come with good terms and low interest rates for consumers with Credit Report Scores in this range.

760 to 850:  Consumers who have Credit Report Scores in this range are generally approved for loans and credit cards that have the lowest interest rates the market offers.

For more information on Credit Report Scores and debt, visit NCO Financial Systems, Inc.'s Consumer Help Unit website at www.consumerhelpunit.org.

We are required under state and federal law to notify consumers of the following rights. This list does not contain a complete list of the rights consumers have under state and Federal law. Please click this link for important information about your rights. State and Federal Disclosure Link.