The credit score range of FICO products is usually between 300 and 850.
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.
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.
you will have a bit more room for mobility in finding a loan but the rates still may not be good.
This is average, the rates better than the previous categories but not the best. You shouldn't have a problem obtaining the loan.
This is good. Loans will come easy and rates are decent.
This is where the lowest rates should be.
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.
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|
There's a few things to notice here.
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|
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!!!