Understanding the Experian Credit Rating Scale
A credit score is important to consumers as it is directly linked to how much they will pay and if you can obtain a line of credit. Many people are often ignorant about what their score is and how it is looked at by lenders. Experian provides not only the score but the scale to provide more information to consumers on what their credit score actually means.
By using the scale, consumers can make better decisions about how they use their credit and be informed how lenders view their score. By following the scale and checking on the score periodically, consumers can understand the best way to increase their score for more optimal lending.
The Credit Scale
The Experian credit rating scale goes is measured in both numerical and alphabetical values. The lowest rating of 501 is considered the poorest rating and the highest of 990 is looked at as the best possible rating with an A value. Consumers can find themselves throughout the scale depending on their history and present activities.
The scale takes into account several different factors to ensure they rate the consumer properly and effectively for lenders. For example, the recent credit obtained, the payment history, and the percentage of the amount of credit used are the three largest criteria that are used to measure the score.
These play a vital role in telling Experience a lender how risky the consumer will be. By lowering the amount of credit used and ensuring the payments are made on time, consumers can place themselves higher on the scale.
How the Score is Determined
There are other things that play into a person’s credit rating as well. The age of a person’s credit and their total balances do weigh in on how their score is determined. Even though it may not be weighted as much as other factors it can mean the difference in being rated a B, C, or D. Lenders will treat consumers differently depending on their rating.
In fact, some may have a bottom limit as to what they will accept and deny someone who is only a few points away from having credit extended to them. This can be detrimental to a person who is looking to buy a home or needing a loan to stay ahead. Consumers can expect to pay considerably more for a loan with a C score than a person who has an A rating.
For those that find themselves on the lower end of the spectrum will have to work hard at getting their score and rating higher. Otherwise they will pay more for lending or be rejected for loans and credit. The first thing consumers must do to get on track with a good score is by finding out what their current rating is.
They also need to take a look at what their credit report says. If there are discrepancies these can be appealed. If there is factual negative information on the report, those need to be reversed by making continual on time payments to bills and paying off as much debt as possible.
This will lower the risk of the consumer, and lenders will be more readily to handle out credit to them. Consumers should continue to stay informed of what their rating is and what is placed on their credit report to ensure they always receive the best lending opportunities.