Generally speaking, a good credit score is anything above 700 points.
However, if you look across the Internet, you’ll see that everyone has their own opinion.
In a way, this makes sense – it reflects the industry.
You see, every single lender has their own criteria when determining an individual’s creditworthiness.
Breaking credit scores down into ranges is the best way to conceptualize your score. It gives you the basis to compare where you are with where you want to go.
It helps you anticipate how you may be treated by potential lenders, insurance companies, and even employers. And it’s how the lenders do it too.
What’s Your 2017 Credit Score?
Are you in the good, average or bad credit score range? Find out!
Continue reading to find out exactly where your credit score puts you in the eyes of lenders.
Credit Score Ranges
FICO is the most widely used model so that’s really the only place to start.
The standard FICO credit-scoring scale goes from 300 to 850, with higher numbers reflecting better credit.
Excellent Credit Score: 800-850
If your score is labeled “excellent”, you’re golden.
This always means you are in the upper echelon of potential borrowers in the opinion of the credit bureau or lender you received the rating from.
It is the best credit score range there is.
You’ve done a superb job managing your finances. You have a long credit history, devoid of late payments, collection accounts, and other negative marks. You also have a stable employment history, experience with various types of credit, and multiple established credit lines.
You’re pretty-much-guaranteed approval, the lowest possible rates, and best terms.
You don’t have to have a “perfect” credit score to get this kind of treatment as the vast majority of lenders give anything in the 800s a pass.
It’s also important to note, some lenders set the bar for “excellent” as low as 720, others as high as 800. It really just comes down to what type of credit you are applying for and who the lender is.
Very Good Credit Score: 750-799
To many lenders, there isn’t much difference between 750 and 800. You’re going to get approved and offered the best rates so they might as well just call you “excellent”.
But there is a difference. One of the most common differences between individuals with scores in this range and in the one above is their debt-to-income ratio. A late payment here and there or some murkiness in your employment landscape could also be holding your score back.
Generally though, you’re a shoo-in for all types of credit. From here, the less your score the bigger the drain on your wallet.
Good Credit Score: 700-749
For the most part, a “good” credit score is going to get you approved.
You just won’t be afforded the lowest rates and VIP treatment like those above.
You generally have a well-managed credit history. However, it’s not blemish-free. You’ve had a couple bumps along the way:
Perhaps a collection account or two in your history. Maybe a rough patch of late payments awhile back. Or you might just have a little too much credit card debt. Whatever the case, you have it mostly under control and in the past.
You will be eligible for most loans. And scores in this range won’t hold you back in terms of getting insurance or finding employment.
Those problems start the next level down.
Fair Credit Score: 650-699
Also called an “acceptable” or “average” credit score, if you get this label, it probably means your financial situation is trending one way or the other.
You were doing well but have run into some trouble recently.
You are steadily building up your financial foundation after tough times.
When you get into this area, creditors really start to look into the details of your credit report to see exactly why your credit scores are what they are.
For instance, you’ll have a tough time securing credit if the main thing bringing your score down to this level is late payments.
Expect to be asked for down payments or collateral for some types of credit.
Expect higher fees, interest rates, and even insurance premiums.
And don’t expect your “fair” rating to be ignored if you’re looking for a job in the financial, chemical, pharmaceutical, or defense sectors. Opportunities that require a high level of responsibility may not be open to you.
Luckily for you, if you get your affairs in order, you could be in “good” territory in a few months. Emphasize paying on time and reducing credit card debt, and you’ll be in the clear soon.
Because if things get much worse from here, your poor credit score will really begin to weigh you down.
Poor or Bad Credit Score: 600-649
This is not the place anyone wants to be.
Bad credit is often a direct result of real-life hardships.
Also referred to as “subprime” credit, it’s likely you’ve had multiple or ongoing credit issues. Poor payment history, collection accounts, bankruptcy filings, or out-of-control credit card debt could all be culprits. Likely, a couple of them are working in tandem against you.
Unfortunately, credit scores don’t take into account what may have contributed to your poor credit score. All that really matters to lenders is that you clean it up.
For now, you’ll be subject to the lender’s terms for just about any line of credit for which you can get approval. You might need a cosigner. And you may still need a significant down payment or collateral as well. Mortgage loans are most likely out of your reach completely.
Insurances companies will likely offer you a limited selection of their products and services at much higher rates than your equally-healthy, higher-credit counterparts.
Whatever is going on in your life, you’ve got to get this under control. If you allow things to continue this way, echoes of what put you in this position will continue to affect your future.
Very Bad: 300-599
Another barely-necessary designation, some authorities refer to credit below 500 or 600 as “very bad”. But it basically means you are in the absolute lowest credit score range.
When it gets to this point, the only lenders willing to service a loan for you are those who specialize in lending to this group. And it’s unlikely that down payments or collateral are going to help you much at this point.
You’re also going to have a hard time getting insurance. And employers who check credit reports just won’t consider you.
Simply put, this kind of credit score leaves you with fewer options.
And truth be told, you probably shouldn’t pursue any right now anyway.
If you’re credit is this poor, you need to focus on reducing your debt, eliminating collection accounts, and making payments on time.
In all probability, you have a bankruptcy, active judgment, or repossession hurting you score. Or perhaps you have several active collections.
The only other possibility is that you have little to no information on credit report with which to build a score.
Yes, those who have not had accounts that report credit information get stuck with low scores. Luckily though, if you fall into this “credit newbie” group, it will be easier to build your score than someone with accumulated negative marks against them.
But if your credit score falls below 600 for the typical reasons, it might be time to contact a credit counselor and create an actionable plan to get your credit back on track.
Why creditors emphasize the range more than a specific score?
The reason is this:
Each lender chooses their own specific criteria. And in many cases, credit scores only count as one factor. A major factor no doubt, but the individual creditor gets to choose exactly how they want to evaluate credit applicants.
Because lenders may pull your credit score from multiple sources or may like to look at several different credit scoring models, what becomes important is the range you fall into.
That is basically the purpose of the credit models having these ranges in the first place.
They function as fast-reference for lenders. Therefore, you can use them for the same purpose. So focus on the ranges your scores fall into rather than obsessing over every little point.
These are the most popular credit scoring models nowadays.
|No||Credit Score Type||Range||Source|
|3||Vantage 1.0 and 2.0||501-990||(source)|
|4||PLUS score models||330-830||(source)|
|6||Experian National Equivalency Score||360-840||(source)|
|7||Equifax Credit Score||280-850||(source)|
Where To Go From Here?
Now that you have a basic understanding of the different credit score ranges and how they may affect you.
Remember, you don’t need the max credit score to become widely approved but the higher the range you get into, the less your various debts will cost you in the long run.