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The Curious Bag
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Credit scores' importance lies in its use by lenders to determine whether or not you are a high risk loan. The most common credit score in use is the FICO score.
Scale
The FICO credit score scale runs from 300 to 850, with the highest scores representing lower risks.
Qualifying
A score in the mid-700s will usually qualify you for the best interest rates. If your score is below 600, you will have trouble getting a loan.
Factors
The FICO score looks at your payment history, how much you owe, how much credit you have applied for in the past two years, the types of credit you have used and how long you have been using credit.
Time Frame
The amount of time information--good or bad--remains on your credit report is limited to seven years for most entries. Inquiries only remain for two years.
Alternatives
The VantageScore uses a scale from 501 to 990, with higher scores being less risky individuals. The score is sold by Experian, but only a few lenders rely on it instead of the FICO score, according to Bankrate.com.
Source:
MyFICO: How Your FICO Credit Score is Calculated
Bankrate: VantageScore vs. FICO Credit Score
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