Credit Score Range- How do I stack up?

Posted by Erica Steeves on October 12, 2018

Credit Score Range- How do I stack up?

Your Credit Minute Show Notes:

  • 00:01                                   Hey, guys. This is Nik Tsoukales with Key Credit Repair. I’m taking you through a quick credit minute talking about the different credit score ranges. So, I’m going to break it down in three different ways for you. Okay.
  • 00:11                                   The first credit score that we have is something called the Vantage score. Vantage score 3.0 or 4.0. Okay. Then, we have your FICO score. Um, typically what you’re seeing online is FICO 8 and FICO 9, and then I’m going to give you an additional FICO score as a bonus round. This has a little house on it, and I’m going to explain in a second why this matters.
  • 00:40                                   So, the first thing we’re going to talk about is the Vantage score. Okay. What is a Vantage score? Where do you get it? Okay. Vantage score is the credit score you’re going to find on creditkarma.com. It’s a free credit score that you can access. Okay. The Vantage score is owned by the three credit agencies. It’s owned by TransUnion, Experian, and Equifax. Okay. Um, it is an educational purposes only credit score. Most banks and lenders don’t use it, but for the purpose of credit repair, monitoring your credit, it’s a really good range.
  • 01:11                                   So, I’m going to actually read off some notes here for you guys and give you the exact break down directly from FICO in terms of where we should be. Okay. So, to me directly from Vantage score. So, you have, okay, let’s see. We’re going to go from 300 to 600, that is considered a poor credit score in their eyes. Okay. Then, you’re going to have 601 to 660, which is considered a fair credit score. Okay. Then, we’re going to go 661 through 780, which they consider good, and then 780 plus, which they consider excellent.
  • 02:04                                   Now, keep in mind, this is for educational purposes only. So, if you’re in these ranges, um, you’re doing pretty good. If you’re in this range, you’re really doing amazing. Okay. Uh, let’s move on to FICO score. Okay.
  • 02:23                                   So, one of the most commonly found FICO scores online for educational purposes only is FICO score 8.0 or 9. Okay. And, their range is going to be fairly similar with a few exceptions. 300 to 579 is going to be what they consider as poor, and then we’re going to say 580 to, let’s see here, 669, and by the way I’m going to show you in a second why I could care less what they say. This is an important part of this. I could care less what these numbers are. 670 through 739 is considered good. 740 plus is considered excellent. Okay. And, by the way, this score caps out at 850.
  • 03:22                                   Now, I could care less what Vantage score says is a good credit score or a bad credit score, and I could care less what FICO score or FICO 8 says is a good or bad credit score. So, we’re going to go ahead and we’re going to throw all of this out. We could care less. What we care about is what we can get with our credit scores, and most of my clients are trying to eventually buy a home, and if you’re buying a home, you’re not using either of those two credit scores. Those are just for educational purposes only.
  • 03:48                                   What we care about is another [inaudible 00:03:53] FICO. We’re going to call this the house FICO score. Okay. So, when you go to get a mortgage, uh, the mortgage lenders going to pull something called a trimerge credit report. Okay. That data- When they pull that data in, they’re going to push it through, uh, the FICO algorithm and issue you a score, okay, but the way the scores presented to you is going to vary between the three bureaus. Okay. So, you could have the exact same data between all three bureaus, and there’s a variation natural algorithm that’s used that’s why no three credit scores are exactly the same. Interesting stuff here.
  • 04:32                                   Experian, they’re using a version two. Okay. Equifax is using- using version five, and TransUnion is using version four. If you’ve ever heard of a Beacon score, guys … Some of your old school bankers will know this. They’ll say, “Hey, what’s your Beacon score?”. Okay. In the old days, your Equifax credit score was called a Beacon score. Now, these credit scores are all from FICO. Okay. These are the scores that matter. This is what the banks and lenders are using.
  • 05:05                                   Now, let’s talk about the ranges. In terms of what is considered good or bad, I mean, it’s kind of arbitrary. What I care about is what I can access with my credit score. Okay. So, I’m going to give you a few numbers to focus on. 640, 680, and 740. Okay. Goal number one, goal number two, and goal number three. Okay. Now, obviously, these scores range from about 300 to 850, but again we could care less about that.
  • 05:35                                   What I care about is this … 640 is a goal number one for the majority of my clients. Why? Because that’s going to allow them to access most, um, FHA back loans. So, essentially, you’re getting a house around 640. Now, there are some banks and lenders that will go lower than that. They’ll go to 600 or even 580, but there’s usually contingencies and more complicating factors that they want to get you that loan, but 640 you’re- you’re in. You’re approved. You’re getting something pending all the other things are- are working out in your favor. Okay.
  • 06:04                                   680 is just about the national average. Okay. I care about that. I want to know that I’m at least average. I don’t want to be below average. Okay. Also, that’s technically the beginning of most conventional findings. Conventional findings means basically what they’re not looking for the Federal Housing Administration, conventional money. Uh, they’re not looking for the Federal Housing Administration to back your mortgage. Okay. So, usually the rates, the fees are going to be lower. Okay. You’re just going straight to the bank. They’re saying, “Hey, you’re- you’re average. You’re making a living. Let’s give you a regular loan”. Okay.
  • 06:42                                   And, then 740. 740 is considered really that crème de la crème at the bank level. When they see a 740 plus at that FICO score, that Beacon 5.0, that FICO two or that version four, that’s a credit score that’s going to get you the lowest interest rates. That’s what you’re going to be able to really competitively shop from one bank to another. That’s when you’re getting the best interest rates on things like credit cards, the zero percent APR offers, zero percent on a Cadillac for 12 months offer, all that good stuff. That’s where you want to be.
  • 07:15                                   So, regardless of what a website is telling you guys. Good, fair, bad, excellent, green light, red light, 10 stars or none, we can care less. What we care about is what is your credit score getting us? Is it getting us a house? If not, then who cares. Guys, this is Nik Tsoukales with Key Credit Repair and this is your credit minute. Have a great day.