Because credit scores vary among the three main credit bureaus and specific lenders depending on what factors from credit reports they use to weigh the scores, interpret your scores by where they fall on a risk model and how lenders evaluate the risk, explains U.S. News & World Report. Credit scores above 750 generally indicate excellent credit, scores from 650 to 750 mean good to very good credit, and scores under 650 mean bad credit, reports About.com.
Credit scores consist of an evaluation of five categories of credit report data, including the history of your past credit payments, the amounts you owe, the length of your credit history, and the mix of various types of credit and new lines of credit, states the Fair Isaac Corporation. Although FICO has a percentage system for rating the importance of the various categories, their significance may vary depending on whether you have a lengthy credit history or whether you have not been using credit for a long time.
If you have low credit scores, ask lenders why they charge higher fees or refuse applications for credit and take steps to improve those specific factors, advises U.S. News & World Report. Generally, keep your credit balances low, and pay your bills on time, recommends Consumer Reports. Avoid canceling unused cards or opening too many new credit accounts.