Your Credit-What is a good credit score?

This question really depends on the lender and how they rate individual scores. It is a good idea to speak with your lender, who would be best able to answer that question; however, we can make some generalizations when speaking about FICO (most widely used) scores that range from 300 to 850:

• 770 or above - This is considered to be an excellent credit score. At 770 and above you can generally obtain the best lending rates.
• Between 700 and 770 - With 725 being the average score in the United States, this range is usually considered to be between very good and excellent credit, and can be looked at as the medium.

Once you go below a 700 score, however, it becomes difficult to categorize credit as good or bad.

• Between 650 and 700 - Considered very good credit, although some institutions may consider a score of 650 to be excellent credit. Again, this is specific to the industry and the target market the institution is after.
• Between 620 and 650 - A good credit score. This is generally considered the cutoff point for a prime rate loan. Lenders generally view people with scores between 600 and 620 to be a much higher credit risk.
• Below 620 - Lenders see you as a high credit risk. While you can still obtain loans and credit cards in this range, they will often be secured credit cards and loans at the highest interest rate. If you have a score below 600 you are generalized as someone with having credit problems and probably have open credit problems that need to be addressed.
• Below 550 - Any FICO score below 550 is considered to be awful credit (multiple bankruptcies, loan defaults, past-due accounts, judgments against, etc.)

As I said, this is a general list for FICO scores that are calculated to 850. There is also your Experian score (330 to 830) and your TransUnion Score (150 to 934). There is no “standard” for estimating credit risk by companies, so this information should be used only as an overview when determining your likelihood of being approved for a credit card or loan.

Next time we will get into contacting the three credit agencies and possible ways to clean up your file and improve your scores.