What Is a Good Credit Score?
Your credit score is a number that is also referred to as your FICO score. This gives lenders the ability to assess how likely your are to pay back a loan on time. The higher your credit score, the less risk they assume, and the better loan rate you receive.
Companies report your payment history to 3 major credit bureaus: Experian, Equifax and TransUnion. They may not all have the same information so your credit score may vary slightly depending on which bureau your credit score is pulled from. They report on your payment history, the length of your credit history, the amounts you owe, and the types of credit you have.
Credit scores can range from a low of 300 to a perfect score of 850. These are the levels of risk and FICO scales that are commonly used to determine what kind of loan you can get and the cost of that loan.
760 - 850 Excellent, lowest rates
700 - 759 Very Good, relatively low rates
680 - 699 Acceptable, normal loan rates
620 - 679 Uncertain, higher rates
Below 620 High Risk, highest rates
Many lenders use 620 as a base number since anything less is considered high risk. Do the best you can to get your credit score above 620 before seeking a new loan.
Tags: credit bureaus, Credit Score, fico score, lending practices