First, if you can, turn the BMI setting off, it is a completely worthless measurement not based on any medical evidence. It's unfortunately a tool the insurance companies use to categorize and deny people coverage for things, and it is even more unfortunate that some doctors still evaluate people against it; it's a total sham.
Some of the scales are more accurate than others, and it doesn't really seem to be based on price (I've tried a few). The only way to really know is to get a good commercial body scan, like Dexa, at a medical or physical therapy clinic and compare. I've found the one I use now to be pretty accurate, but even if you don't compare it to something like that, what you are really looking for is trends.
The measurements can change depending on how hydrated you are, so it's best to choose a regular time of the day, usually first thing in the morning, to take a measurement. This will also give you the most accurate trend over time if you always stick to the same schedule.
You want your body fat % to go down, obviously. It can go down, even if your weight doesn't, but you will see it fluctuate up and down a bit more than weight, but the overall trend should be down.
You want your muscle mass % to go up. That doesn't mean you have to build muscle, it just means over time your body fat % and muscle mass % should trend in opposite directions. Most, if not all of us will lose some muscle mass in this process, but you don't want your muscle loss at the same rate as fat loss, you want it to be much slower, or if you add in some resistance exercise, you can maintain your muscle mass pretty well. Either way, the % of your body that is muscle should go up, even though your actual mass is decreasing.
Your Body water % is represents your level of hydration. Fat cells are about 10% water. Muscle cells are about 75% water. Other cells have various amount of water. You actually want to be around 50% or higher all the time, which is a reasonably good hydration level. It may be lower at first, but as your fat decreases and your muscle mass % increases, generally speaking your Body water % also increases.
Just like weight, you have to be patient, watch it over time and look at the trend lines month to month, if you are interested in that sort of thing. It is another measure, but just like weight, it can be frustrating if you put too much emphasis on its importance.
Non-scale victories can be much more telling of your progress. New clothes, smaller belts, happier knees, getting rid of medications, hitting exercise milestones, doing things you haven't done in a long time, and just basically how you feel. It's a long term game, and you have to look at all the wins you have along the way because sometimes the things we measure like weight and body fat and such will seem to be going against us, but sometimes those things are deceiving to what's really going on.
All that to say, I like watching my trends, even when a certain measurement may not be what I expected or want on a particular day. It helps keep me focused on my overall plan and strategy. That works for some people, and others it doesn't.
