Brent’s Credit and Debt blog

We all get judged every time we want credit. The judge is impartial, has no compassion, and bases all of its decision on numbers. It doesn’t care what has happened in your life, or how you have changed, or how you deal with adversity. All it cares about is a number.

That number is your FICO score.

This little number, in a range from 300 to 850, is a measure of how responsible you are with your credit. It takes into account your past payment history, your credit line to credit used ratio, and public record entries on your report, how recently you have applied for credit, and several other factors. A score on the lower end of the range shows that you are not very responsible with credit, and a score on the upper end is a very responsible credit user.

So, what is a good score? Let’s take a quick look:

• Below 580: This is considered very bad. You will be able to get loans in the sub-prime market, but usually at very high interest rates. Often, you will have to spend time rebuilding your scores before you can get a large loan.
• 580 to 620: You are now in the ‘almost good’ range. In this range, you can get a credit card, or a car loan. You will need to provide extra documentation for many of your credit applications. You have a good foundation, or have cleaned a few things up. Now it is a matter of maintaining your report to make it better. You are still considered fairly high risk for default, but many companies now cater to your situation.
• 620 to 670: Scores above 620 are considered ‘good’. This puts you in the prime market for interest rates on loans. A 620 credit score will allow you to get better offers for credit, better interest rates, and you won’t have to prove yourself as rigorously as you would with a lower score.
• 670 to 720: Scores in this range are considered ‘very good’. You will have access to better interest rates, higher credit limits, and larger loans for mortgages and other high-dollar items. This is where most people with good credit end up.
• 720 to 770: You are golden. This is about the best most people can do. You have a long, established credit history, you take care of your bills, and there are no bad marks on your credit reports.
• Above 770: You are a ‘FICO High Achiever’. You get the best rates, the best service, and overall have a financial picture to be envied. Remember, though, as you get to these rarified heights, a single bad item on your report will drop you faster than at any other level.

There you have it. A quick definition of what a good credit score is. If your score is low, a little work can carry you a long way towards those higher scores. If it is higher, make sure you monitor your credit so you won’t get surprised.

To get a copy of my FREE e-Book ‘The Top Ten Ways You Can Wreck Your Credit’, just click the link.  You will be taken to a page where you can get more information about downloading the e-book.  This book tells you what you should avoid doing concerning your credit, and what negative impacts can occur if you treat your credit wrong.