Ask a dozen credit experts what makes a good credit score, and you’re likely to get a dozen different responses / ranges. So for this tutorial, we have taken ten articles on this subject from ten reputable websites and averaged them out. Based on this “scientific” analysis, here is what the experts have to say on the subject of good credit scores…
- 750 or above — If your credit score falls into the range, you should consider yourself lucky (or perhaps just financially responsible). This range is considered to be an excellent score by most mortgage lenders. As a result, you will likely have a much easier time qualifying for a mortgage and getting a good interest rate on the loan.
- 700 to 750 — Credit scores within this range are somewhere between very good and excellent. With many mortgage lenders, there seems to be an “invisible line” at the 700 mark, with regard to what is considered excellent credit. So 700 and up is a great “neighborhood” to be in.
- 650 to 700 — In general, a credit score that falls within this range is considered to be good or even very good, depending on the lender.
- 600 to 650 — Now we are closing in on the most common definition of “good credit” among most lenders. A score in this range is not “very good” or “excellent,” but then again it’s not sub-standard or bad either. So most lenders will view a person in this range as a reasonably qualified borrower. You won’t necessarily get the best rates with a score in this range, but it’s still considered a good credit score so approval should be likely.
- Below 600 — If your credit score falls below the 600 range, a higher percentage of lenders will consider you to be a credit risk. You could still find a willing lender at this point, but you’ll pay higher interest rates than a person with a good or excellent credit score. And this obviously translates to a larger payment each month.
What’s important to note here is that people at the bottom of the scale (with scores in 400′s or 500′s) will have more trouble getting a loan. As
a result of the financial crisis, lenders have had to tighten their standards and are therefore less likely to make loans to borrowers with bad
credit (subprime borrowers).
Of course, if you have a bad credit score, you shouldn’t despair. There are plenty of things you can do to improve your credit, and that’s exactly what we will talk about next.