What are Good Credit Scores?

Why do you need to have good credit scores? Good credit gives you "buying power" to purchase things. Having good credit gives you creative options to make dreams a reality...like buying your own home.

What is are good credit scores? When lenders talk about your credit score they usually mean the FICO score developed by Fair Isaac Corporation. It is today's most commonly used scoring system. FICO scores range from 300-850 and most people score in the 600's and 700's. Higher FICO scores are better. Lenders buy your FICO score from three national reporting agencies (also called credit bureaus): Equifax, Experian, TransUnion.


CREDIT SCORE GUIDELINES:


700 and Above
In general, a score of 700 or above indicates a very good credit history. People with these scores will usually find the loan process quick and easy, and will have a good chance to obtain a loan at a relatively low rate of interest.

650 to 699
Scores between 650 and 699 basically indicate good credit. (Average FICO scores fall into this range.) People with scores in this range have a good chance at a loan at a good rate, but may have to provide additional documentation and explanations to the lender before the loan is approved.

620 to 649
Scores between 620 and 650 indicate average credit. People with scores in this range have a chance at a loan at a fair rate, but may have to provide additional documentation and explanations to the lender before the loan is approved.

Below 620
A score below 620 may prevent a borrower from getting the best interest rates, as they may be considered a greater credit risk-but it does not mean that mortgage funding can't be found!

FOR EXAMPLE:

  • EQUIFAX: 655
  • EXPERIAN: 687
  • TRANSUNION: 647

The "middle score" is usually used for loan qualification. In this example, the middle score is 655 (not the highest score and not the lowest score).

If you have a "ZERO" score you need to "establish" your credit. People often have zero credit if: they are younger and are just starting to build, or have paid off all past debt and years have passed since they purchased anything with credit.


Back To: What are Good Credit Scores?

Back To: Home Page