Starting with a general introductory description about what credit score ratings actually are, we will move on to the factors that determine these credit scores and the uses of these ratings. Last but not the least, this article will present a credit score ratings chart. I hope that after reading my article, you will have no more doubts on the subject. Credit Score Ratings: An Overview Credit score numbers or ratings are synonymous to the term 'FICO Ratings'. FICO, or the Fair Isaac Corp of California, was the first to develop a credit rating system, by assigning individuals and companies, a credit rating score based on their credit worthiness. The credit score ratings are thus, basically one glance creditworthiness indicators, derived by applying a certain formula to the credit report information. They act as accurate prediction models for lenders and help them gauge the risk involved when giving a loan. Many lenders have come forth and have sworn by the value that credit scores hold for them, especially during the underwriting, mortgage and loan approval processes. The credit score ranges between 300 and 900, most companies and individuals fall between the credit ratings score scale of 600 to 700. The higher the credit ratings score, the better the firm's credit standing. Factors that Affect Credit Score Ratings A lot of things affect the overall credit score ratings, for they are nothing but an indicator of your creditworthiness. Let us highlight some of these factors:

• History of Nonpayment of Debt When Due: When there is a history of past delinquency, it is assumed that such behavior will be carried forward into the future. This substantially reduces the credit ratings of a person for he is obviously a high risk for a moneylender.
• History of Credit Facility Usage: If one has a history of credit misuse, for example, a maxed out credit card or casual use of a credit line, his credit ratings scores automatically drop. Once again, such undisciplined behavior represents high risk for lenders as it is believed that the person is irresponsible with his credit facility.
• Age of the Debtor Account: The FICO credit score ratings formulae are biased towards the age of a debtor account. In other words, if someone has had credit for a long time, it is assumed that he is a safer bet than someone else who's new to the credit world. The former will reach a better rating scale than the latter.
• Frequency of Credit Requirement: Credit requests should be in line with the time period involved, for example, a longer time span can allow for more requests but a shorter time span has a limit on the number of times one can ask for a credit facility. If a person has frequently asked for credit, in a very short duration of time, he is assumed to be a 'not so safe' bet, and receives a lower credit score rating.
• Type of Credit Taken: The type of credit someone is already utilizing has a bearing on his credit score rating. A secured credit card is always considered riskier than a one time loan, as a credit card provides leeway for 'many times' credit utilization while a loan just has one credit payment to the debtor and others are repayments to the creditor.

Uses of Credit Score Ratings Credit ratings give a summarized idea if someone is a worthy credit bet or not. But as different people look for different things, like a mortgage broker (looks for long-term repayment ability) and a credit cards company (looks for short-term repayment and customer loyalty to his credit card), will both look for different creditworthiness parameters. Yet, despite the differences of crucial parameters, credit score ratings are generally successful in giving a fair creditworthiness idea to one and all. In fact, these also help a person know his own credit worth and this can help him get better deals for himself in credit negotiations. After all, having a good credit rating is bound to have its own advantages, right? Credit Score Ratings Compilations Credit score ratings are compiled using the data gathered from several places, namely credit card agencies, banks, credit bureaus, financial institutions and other consumer databases. All the information is rated in numbers and these are then added up to reach a determining score. This is the credit rating score that determines if you can qualify for a loan or not. The higher these numbers or ratings, the better your credit terms, and the lower the interest rates you have to bear. The credit scores range between 300 and 850 (or 900), so let us have a look at the credit ratings score ranges individually. They will give you an idea of what is a good credit score. Credit Score Rating Chart I Don't Have a Credit Score! There are people who have no credit score against their name. This is not a reason to panic, especially when you are new to the credit world. A credit score cannot be generated until you build enough credit information. So, if your credit history is very little or you have never taken a loan, you won't have a credit score against your name. Improving Your Credit Score Ratings One can easily improve one's credit ratings by following some simple procedures. Go through the following ways to improve credit scores and increase your credit ratings score:

• Opening a simple savings account, even if the amount saved is not big, it improves your credit score scale by 20 to 30 points. Now isn't that really simple!
• Show responsibility by always maintaining a safe 50 percent balance on your credit card.
• Please do not own too many credit cards. It may work for good show-off value but doesn't pay with so many databases monitoring your accounts.
• Get a credit report frequently. This way, you can correct any errors on a timely basis.
• Last but not the least, don't overburden yourself with credit. Living beyond one's means was never a good system, and this hasn't changed now, even though the times have changed. Use credit for things that really matter but cannot be afforded at one go (house, car, etc.), not weekend shopping and cafeteria bills, unless you intend to pay these off before any interest is imposed on them (in that case, your credit score may actually increase, for then you will be a responsible, low credit risk individual).

Reputation once lost, cannot be regained. So, be careful with your credit reputation.