Understanding credit score ranges from Experian can be confusing, especially since each of the three credit bureaus may report different scores for the same individual. This discrepancy comes from each bureau having slightly different information about a person, affecting the calculations. Although the process for determining a range is complex, there is nothing ambiguous about its outcome. Credit card companies and other lenders, like banks, use the information in an Experian credit score range to determine how risky it may be to loan money to a potential consumer.
Keeping up a good credit score range is vital to securing future credit. Even if you now have a credit card, you may eventually need another one for an emergency or a large purchase. Having a poor credit range is a surefire way to get rejected for that new credit card, or even a more important credit situation like a bank loan, home or automobile purchase, apartment rental and even going for a job. The range is calculated using the FICO system, which looks at your outstanding bills, payment and credit histories, the types of credit you have acquired and any new credit for which you may have applied.
If you fall within a low range, and are not outright rejected, you will still suffer some consequences, like paying higher interest rates than someone in a high credit range. A low range alerts lenders to a risky situation, in which the likelihood of payback is less certain than in other cases. Often, this attitude is unfounded. Many people with a low Experian credit score range are not there due to debt, but a simple lack of credit history. Young adults, in particular, have not yet lived long enough to build up credit. Others, too, may simply have never seen the need for a credit card or loan. To lenders, however, no credit is still seen as bad credit.
The lowest Experian credit score range you can place into is the 400 to 450 range. Any lower, and likely you do not have credit at all. Moving a credit score out of this range can take some considerable work. The 450 to 500 range has many of the same problems, with few lenders willing to take on such a risky account. If you are in an average credit score range, your score will be between 500 and 550. This range opens up options for credit, but at very high interest rates and restrictions on purchases.
Other Experian credit score range numbers include 550 to 600 and 600 to 650, which still involve high interest rates, but also a higher chance of success at receiving credit. These ranges are the easiest to improve upon in a short amount of time. At the top, 650 to 700 and 700 to 750 will likely qualify you for many loans and credit options, with slightly lower interest rates than the other ranges. Anything over 750 is a superior score, giving an individual a whole world of credit options and incredibly low interest rates.