scores typically range from 300 to 850 based on the The higher your score is, the better. Each lender determines what it considers a good or bad score. Although variations exist, there are general guidelines to give you an idea. The FICO® guidelines for a  score range:

• Excellent : 800+
• Very good: 740 to 799
• Good: 670 to 739
• Fair: 580 to 669
• Poor: 300 to 579

According to FICO®, the average American’s score is 704. Although there is a difference between a fair score and a bad  score, it’s important to note that many lenders will consider consumers with a score under 600 as risks.

Reasons for a negative score come in many forms, including:

• Overdue bill payments
• Maxed out cards
• Charge offs and collection accounts
• Foreclosures
• Identity theft
• Excessive third-party inquiries Each item has its own level of severity and the power to damage your score. Combined, their strength can cripple it. There is a chance the cause of your low score is simply human error. A report consists of information that’s passed from consumer to lender to bureau. Over 25 percent of reports have errors in them. Be sure to check your report regularly.

If you have a score of 600 or lower, lenders consider you more of a financial risk and some may even reject you outright. Lenders will make a decision about the risk they are willing to take in extending . Some companies only work with excellent, so even someone with a score of 700 could be turned down. If a lender does extend you , you’ll pay more in interest than someone with a higher score. With a low score, you won’t qualify for zero percent interest cards or personal loans at single-digit interest rates. You’ll face higher auto and mortgage finance rates as well, and you may get stuck paying a utility deposit that someone with a higher score doesn’t have.

Having a bad score can lead to many consequences. It communicates to lenders that you have a history of poor borrowing habits and are a risky investment. In turn, a bad score can cost you money. Since you’re considered less worthy, lenders will adjust the terms of a contract by applying higher interest rates and other unfavorable terms. Over time, this can create quite a dent in your wallet. For example, a typical home can cost between $50,000 and $130,000 more in interest if you are buying with bad. Banks are not the only ones looking at your score. Many institutions make assumptions about you based on your history. Landlords, car dealerships, insurance companies and potential employers can check your . Bad could be the reason for being denied an apartment, not being able to afford a car, increased insurance premiums, or even getting denied a new job. This three-digit number is more than just a score — it’s also your financial reputation.

If you’re having trouble getting approved for a card or loan, you have options to work towards score. Consider the following tips:

• Become an authorized user on someone else’s account.
• Get a cosigner who has great. The lender will consider your cosigner jointly responsible for any debt.
• Open a secured account. You can put cash in an account and the issuer will allow you to borrow up to a certain percentage of the money.
• Work to pay off your debt and keep balances low.
• Keep unused cards open.

Because impacts so much of our lives, a low score can be extremely harmful to your financial goals and lifestyle. Fortunately, improving your score is possible. This includes disputing an error, making payments on time and paying down card balances.