By William Cao. Edited by Arjun Chandrasekar.


Imagine every individual having an assigned number from 300 – 850 and the value is a “make or break” type notion. The lower the number to 300, then the individual can lose a significant amount of money. On the other hand, if the value is higher and closer to 850, then the individual can save a lot of money. That is essentially a credit score in a nutshell.

The truth is, every individual actually starts out with no credit score at all. A credit score comes into play if you have some plans on borrowing money. In short, a credit score offers a snapshot of your personal debt repayment history at a single point in time, letting potential lenders know what kind of risk they would be taking. There are 3 different credit scores: Experian, TransUnion, and Equifax. The numerical values ranging from 300 – 850 is called a “fico score” and there is an inverse relationship between the score amount and the risk. The higher the score, then you would be paying a lower interest rate while a lower score would pay a higher interest rate when asking for a loan. More about credit scores can be read here

Typically, the classification values can be seen as below.

Excellent: 800 – 850

Very good: 740 – 790

Good: 670 – 739

Fair: 580 – 669

Poor: 300 – 579


There is no need to worry about getting a good credit score. Roughly more than 50% of Americans have a score of 700 and above as long as you stay responsible, then you will have a good credit score and the benefits that come with it.

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