What is a Good Credit Score?
Good Credit Score – It behooves you to have a good credit score. Why? Because a good credit score is key to borrowing money – whether it be for a car loan, home mortgage or some other type of loan – with low interest rates. A poor credit score, on the other hand, may disqualify you from qualifying from a loan or stick you with a high interest rate. Bottom line – the better your credit score, the more favorable borrower you are.
So with that in mind, just what is a good credit score? And when should you repair credit? To answer that question, let’s take a look at the FICO score, the score that the majority of lenders use to determine borrower risk. Specifically, the FICO score ranges from 301 to 850. Here’s a breakdown of the ranges that most lenders use to assess risk in a nutshell:
- 750+: Anything at 750 or better is considered excellent credit. A borrower should be able to get approved with the lowest possible interest rates on loans with this score.
- 700-749: Scores in this range are considered “good” and should lead to approval with low – if not the lowest available – interest rates.
- 650-699: This range is considered “fair.” And while borrowers can still get approved in this range, they may end up paying a higher interest rate.
- 600-649: The range between 600 and 649 is considered poor credit. Credit scores in this range may jeopardize loan approval. If approval is granted, borrowers may have to pay significantly higher interest rates from someone with good or excellent credit.
- 599 and below: This is considered bad credit.