What Is a Good Credit Score?
• Because there are many different credit scoring systems with different scales, a “good” credit score depends on the scoring system used by your particular lender. However, you can get a very good idea of whether you have a “good” credit score by getting a credit score and report from Experian. If you have a “good” credit score from Experian, you likely will have a “good” credit score with your lender.
This question really depends on your lender and how they rate individual scores. It is a good idea to speak with your lender, who would be best able to answer that question; however, we can make some generalizations when speaking about FICO scores that range up o 850: • 750 or above – This is considered to be an excellent credit score. At 770 and above you can generally obtain the best lending rates. • Between 700 and 750 – With 725 being the average score in the United States, this range is usually considered to be between very good and excellent credit, and can be looked at as the medium. Once you go below a 700 score, however, it becomes difficult to categorize credit as good or bad. • Between 650 and 700 – Considered very good credit, although some institutions may consider a score of 650 to be excellent credit. Again, this is specific to the industry and the target market the institution is after. • Between 600 and 650 – A good credit score.
A good credit score is vital in securing any sort of favorable credit or loan terms. Credit scores are a reflection of financial dealings with lenders and/or creditors; a good credit score, therefore, will not only assure considerable savings on interest rates, it will also expedite the loan or credit approval process. Poor credit, on the other hand, will often result in the payment of higher rates for lesser credit or loan amounts and, very often, the outright denial of credit or a loan. The primary credit scoring repository is the Fair Issac Corporation (FICO®), which developed the most widely used credit rating system. FICO® gathers and assesses credit and loan information from the three largest credit bureaus, Experion, TransUnion and Equifax, and disseminates this information to banks, lenders and credit card companies.
FICO® scores can range from 300 to 850, but the majority of scores usually fall within the 600s and 700s: • 20% are above 780 • 20% are in the range of 745 – 780 • 20% are in the range of 690 – 745 • 20% are in the range of 620 – 690 • 20% are below 619 Since there is no universal score cutoff used by all lenders, it is hard to say what a good score is outside the context of a particular lending decision. For example, one lender may determine that a score of 750 may qualify you for a platinum credit card, whereas a score of 675 may indicate that you are a better match for a standard card.
