Credit Score Range

The meaning and what you get out of it!!!

The credit score range of FICO products is usually between 300 and 850.

Your credit score gives companies an unbiased view of how much of a credit risk you pose to them when they wish to do business with you.

If you DO have that number in hand, do you understand where you stand in that creditor's eye?

You can never be totally sure of that unless you speak to them about what is held as important in their decision making process.

The proceeding information can give you a general idea where you stand on the credit score range.


There seems to be a lot of difference of opinion on the number you need for the best rates in the credit score range, but generally over 700 is the optimal number.

Lenders requirements are much tighter than in the past and the need to assume less risk is not an option.



Here is a generally agreed upon scale of the good bad and ugly:


The credit score range of FICO



600 and below

Very poor credit

You will have a hard time finding credit and if you do it will be at rates that hurt. Also you will need to show more documentation in order to be approved.

600-640

Poor credit

you will have a bit more room for mobility in finding a loan but the rates still may not be good.

641-699

Average credit

This is average, the rates better than the previous categories but not the best. You shouldn't have a problem obtaining the loan.

700-740

Good Credit

This is good. Loans will come easy and rates are decent.

above 740

Excellent

This is where the lowest rates should be.



The excellent level is where the industry differs. Some say you only need around 720 to get the best rates and others claim as high as 770.


Then there's the credit score range of vantage score. Its range is 501 to 990.

A= 901 - 990

B= 801 - 900

c= 701 - 800

D= 601 - 700

F= 501 - 600



This is kind of obvious.

  • The A category are the prime lenders who receive the best rates.
  • The B category will always be taken maybe the rates aren't quite as good as the primes but one will still be happy with what they receive.
  • The C category is average. You should still be able to get approved but the rates start increasing.
  • Well the D category, You probably won't be happy. I say work on improving your score unless you are in a desperate situation, that is if you can find a loan.
  • F category serious work on your credit is in order.



Here is a chart from my FICO that shows (in their credit score range) how things change in the different scoring scales.

This is an example of interest rates on a mortgage for $300,000.00 on a 30 year fixed rate loan.


SCORE % rate Monthly payment
760-850 4.770 1569.00
700-759 4.992 1609.00
680-699 5.169 1642.00
660-679 5.383 1681.00
640-659 5.813 1763.00
620-639 6.359 1868.00




There's a few things to notice here.

  • There are 6 categories here. The average credit score range seems to have more subcategories with different rates.
  • Here you need to be at 760 or above for the best rates.
  • It would also seem that if you don't at least score 620 you can't play.
  • Then again in this economy would you want to?
  • You'll be above 1900.00 and with taxes and insurance you'll be in the mid 2000.00 (2500.00 or above) shudder!



Here's another score scale scenario. This time it's an auto loan for $15,000, no money down and at 36 months. (That's a pretty quick pay off for most people!)


SCORE % rate Monthly payment
720-850 5.721 454.00
690-719 7.369 466.00
660-689 9.407 480.00
620-659 13.245 507.00
590-619 18.073 543.00
500-589 18.698 548.00


Notice here your credit doesn't have to be as stellar for the best rates. Additionally you can have a pretty low score and still be able to get a loan it just won't be that pretty!!


Also consider this is a 3 year loan and it's possible to receive 4,5 and even 6 year loans yet the rates get larger but the monthly payment will be more affordable.



Overall, do not despair, even if the rate you receive is not the most desirable at the time of taking on the loan many times you can work on your score and get that more desirable rate at a different time hopefully when rates are advertised low.

Keep in mind that with a mortgage there can be significant costs (legal writing ones) to remortgage. That's an area for careful research.

Other types of loans don't have those considerations. Also keep in mind that lenders DO have their own criteria for approving loans so when one may say I can't help you, there will be others more flexible in their process and terms.

SO shop on and compare!!


The FICO Website claims that overall the predictability that scores give to the lending industry increases the credit availability thereby decreasing the rates.

It also claims Europe doesn't have this therefore their rates are much higher.

Sounds reasonable, whenever a hot new electronic gadget is up for sale the cost is high due to the supply.

Once there's enough for most of the general public the cost goes down.

So if it's available and you've worked hard for a low rate Kudos to you. Use it!!!



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