FICO Scores are the most widely used and quoted credit score. However, most people do not know what they entail. Credit Scores could have a substantial impact on one’s future and determine your finances to a great extent. Everyone seeking to obtain credit should learn more about what credit scores are and what they mean to them. You never know when you may need credit especially when you need it fast so having a good credit score will go a long way. A good credit score will allow you to get financing regardless of what you will use it to purchase. That is a big plus if you ever find a rare item that you would not have otherwise afforded or if an expected opportunity presents itself, you can act swiftly to take advantage of it. A good credit score is not just good for now; its benefits will spread further into the future if well maintained.
Credit Score Scale
If you receive a 615 FICO Score, it may not be easy to know what that means exactly. You may be wondering is 615 a good credit score or is 615 a bad credit score. The answer would be that on the spectrum between good and bad, 615 falls on fair or average. FICO Scores range between 300 and 850. 615 falls close to the middle. To be exact, the average FICO Credit score would be 575. However, most lenders will put average scores on a range. The range will often be between 600 and 650. This type of score will be different on different credit score ratings. FICO Scores are used since they are the most commonly used.
How does a 615 Credit Score Rank?
What does a 615 FICO Score mean? 615 credit score is average and means that you will probably qualify for most loans. You will be able to access credit from most lenders and purchases through your credit card will go through. You should, however, keep a closer eye on your expenditure and earnings to get a better credit score. You will get average to high-interest rates for the loans you borrow depending on the lender. Prime lenders will charge you high-interest rates if you have average credit. Subprime lenders will charge average interest rates on your loan. You can also qualify for miles and gifts with a credit score of 615. You can get an auto loan or a mortgage loan with a score of 615. It would be wise to spend some time to improve your score before applying for a loan with such a score. A few quick payments on your credit accounts should boost your score landing you better interest rates and help you qualify where you would not have done in the past few weeks.
Is a 615 Credit Score Enough to Get a Reasonable Mortgage Loan?
Unfortunately, a 615 credit score is lower than the 620 threshold many lenders have. Which is going to make it extremely difficult to get a home loan or auto loan.
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How is a Credit Score Calculated?
FICO Scores are calculated using five parameters. These parameters, however, do not carry the same importance. These parameters will have different importance for different borrowers. One’s credit information may have little on one parameter and much on another. Therefore, the impact of a single parameter is more of an estimation than it is a precise figure. The following are the five parameters with how much each weighs in percentage terms:
Amounts owed- 30%: How much you owe on any other credit accounts you possess is a significant factor in a lender’s decision. If you owe too much, you probably will not pay the one you are applying.
New credit- 10%: You should not borrow from multiple lenders within a short period, it will raise some flags. A borrower with too much debt to be paid in a short time is considered unreliable.
Payment History- 35%: The first thing any lender wants to know is, do you pay your accounts on time? Do you miss your payments and if so, how often? The answers are the largest contributor to their decision.
The Length of Credit History- 15%: It is not only about how long you have used credit. It is about your credit performance within that time frame. A substantial use of credit for a long time will often lead to higher FICO Scores.
Credit Mix-10%: How many purchases are you financing through credit? Do you have auto loans, mortgage loans or retail loans? Having too many are dangerous.
How does a 615 Score Rank on:
FICO Score: 300-850
As mentioned above, a FICO Score of 615 will rank around average ensuring you can access credit from most lenders. The score assures loans on home and automobiles among others. Prime lenders will charge high-interest rates. Subprime lenders would offer average interest rates.
Vantage Score 3.0: 300–850
The Vantage Score has the same range as the FICO Score though there are few subtle differences between them. A 615 Vantage Score ranks the same as a FICO Score; it considered fair. Subprime lenders would offer average interest rates. Prime lenders will charge high-interest rates.
Vantage Score (versions 1.0 and 2.0): 501–990
Versions 1.0 and 2.0 of Vantage Score had an outstanding rating that eventually hap to be updated. A score of 615 on Vantage Score was poor and considered risky. Prime lenders would not offer you any credit at all. Subprime lenders will charge you very high interest rates.
PLUS Score: 330-830
A 615 score on a PLUS Score would be considered average, and someone with such a score would have access to the most type of loans. Prime lenders using the PLUS Score would charge high interest rates, but non-prime lenders would charge average rates.
Trans Risk Score: 100-900
A 615 Trans Risk Score would be a rank above average and would be considered good credit. Subprime lenders would offer attractive interest rates while prime lenders will charge average interest rates.
Equifax Credit Score: 280–850
The range of the Equifax Credit Score is slightly larger than the average FICO Score. At difference counts a lot since it would downgrade a 615 score to below average. That means high-interest rates even from subprime lenders with most prime lenders not offering you credit.
How can I increase my 615 Score?
Your credit score can change differently across time periods. You can have a moderate shift in a few weeks if you are diligent enough moderate change meaning about fifty points. You can improve your credit score by a hundred to a hundred and fifty points within as few as six months. It takes a lot of patience and work to improve your credit score but in the long run, it is worth it.
The first step in improving your credit score should be to check your credit report. Get it if you do not have it already. Check the information on the score for errors. The errors may be in your account details or the methods of calculation. Resolve the issue with the credit bureau if there are eras in your credit report. The sooner it can be done, the sooner you can improve your credit rating.
An obvious way to improve your credit score is to pay the amount you owe. If you cannot pay it in full, at least reduce the account balance. Create a new budget that will allocate more funds to your credit card payment plan. You can also find other legal ways to earn extra money to pay off the debt. It is the most rewarding of the ways to improve your score.
You should pay your bills on time. Set up your credit reminders or ask a lender for such a program. Your debt is reduced when you pay on time since you have no accumulated interest fees. It also paints a better picture of your payment history.
You can also get a bank to increase your credit card limit. You will have to negotiate with the lender the amount of increase but the larger, the better. It is an easy way to improve your scores.
Another tip is to avoid maxing out your credit cards. If you keep maxing out one credit card after another, you will appear fiscally irresponsible. Reduce the usage of the amount of credit allotted to you to 20 percent. It builds a margin of safety that can be utilized if it is ever needed.
Do not close any of your credit cards. Closing a credit drops your credit score and alerts the credit bureau. Have a regular charge on each of the credit cards such as a magazine subscription so that it always stays open. The card will have a large unused credit limit that will improve your scores and save you from paying fees for a credit card you do not use.
Open credit accounts only if it is necessary to do so. Do not acquire too many credit card and particularly do not get the cards within a short time. You would be able to keep better tabs on your credit card if they were few. Closer monitoring will lead to better credit scores
How to Get Free Credit Scores?
There are many providers of free credit scores online. The sites have direct access to the nation’s credit bureau. Some sites will provide you with credit reports with ratings across all companies i.e. FICO Scores, Vantage Scores, Plus Scores, Trans Risk Scores and Equifax Credit Scores. Some websites will help you online as well as mobile applications so that you can get you credit scores on the go. It has never been so easy to get your credit scores as it is now. You can also get a site that will send you credit score as frequently as you would like. The best things in life certainly are free.