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What is a good credit score?
Everyone seems to have a different but close opinion. Here is what we have been
able to collect from the various sources that are supposed to know the answer.
Below is a breakdown of the standard classes of credit and their respective
scores:
350-619 Very Low to Low FICO Scores: These
scores most likely occur when something has happened to seriously
hurt your credit score profile or there are not enough accounts or
transactions to elevate your score. There are simple techniques to
use such as paying beyond your minimum required amount due on your
credit cards to fix this issue. Just by using this strategy you will
definitely notice great improvements to your new credit score scale.
In today’s credit environment a credit score of 620 is considered to
be the minimum for a reasonably good chance of being granted credit
with favorable terms.
620-679 Low Middle Credit Scores: This is
lower area which can be fixable as well by using the given strategy
above. Another strategy is to open up another line of credit if you
only have one or two, and using it appropriately. Reasonable credit
terms and interest rates begin here.
680-719 Middle Credit scores: Typically
this is a pretty good credit score to have on your credit report and
is worthy of many loans. In this credit range you could get a
sub-prime mortgage years ago. However lenders now want to see solid
and higher scores to feel more comfortable with lending to you and
loans are much different in this economy. These scores should get
you favorable interest rates and terms.
720-850 High FICO Scores: If you are in
this area then you are most definitely holding a nice clean and good
credit score. Having such a score will allow one to be awarded much
more lending potential as well as very attractive (the best)
interest rates and terms
Knowing your profile of where you stand on the credit score scale will allow you
to strategize what the best ways would be to improve your credit profile.
These will also include paying down your personal debt to below 35% of your
limit. Another way is paying off more than the minimum required payment as
explained above, and accumulating three or more open lines of good credit. You'll
want to use them properly and can soon be in good shape with your credit
building.
Following is a breakdown incrementally of credit scores and how they are viewed:
High 700s
"Those agencies [Fannie Mae and Freddie Mac], which buy mortgages
from banks and resell them to investors, have indicated to lenders that any
consumer with a FICO score above 620 is good while consumers below 620 should
result in further inquiry from the lender, Watts said... Once you get into the
upper echelon of FICO scores -- in the high 700s -- lenders don't care how high
your score is or isn't."
- Knight Ridder
770
Freddie Mac: 770: A+
SmartMoney.com: "The very best rates go to people with scores above 770, but a
score of 700 is considered good (the average score is somewhere around 692),
says Craig Watts, Fair Isaac's spokesperson."
Frontline, PBS: "The best credit rates are given to people with scores above
770, but a score of 700 -- out of a possible 850 -- is considered good,
according to Fair Isaac."
760
MSN Money: "And if your scores are in the 'excellent' category, 760 or above,
you'll probably be able to squeeze out only a few extra points despite your best
efforts."
750
LendingTree: "Typically, scores over 750 are excellent, while those below 620
are considered risky."
Bankrate.com (quoting a co-founder of MortgageIT.com): "If you get above 750 --
with some lenders in some cases -- you'd see another improvement in the points."
740
Fannie Mae: "I think most of you probably know that a 740 credit score
represents an excellent credit risk and an excellent credit history... "
730
E-Loan: "Above 730: Excellent credit"
TransUnion: "Looking solely at your FICO score, however, most lenders would
consider this score as very good."
Scion of Garden Grove: "Sign 'n Drive" with anything above
730
720
CBS: "The best number to have is 720 or above. If your score is 720, there's
really no need to try and raise it because lenders lump you in the same category
as folks with a score of say 800 or 820."
Charles A. Capone, Jr., Ph.D Senior Analyst, Microeconomic and Financial
Studies Division U.S. Congressional Budget Office Washington, DC, writing in
"Research Into Mortgage Default and Affordable Housing: A Primer": For most of
the 1990s, the mortgage market viewed a FICO score of 620 as the bottom cut off
for prime loans, meaning loans that could be sold to Fannie Mae or Freddie Mac.
Scores in the 580-620 range were considered 'near' prime, with labels such as
A-minus, and those above 720 were considered low risk borrowers."
Quicken Loans, a subsidiary of Rock Holdings: "Scores of 720 and above are
considered top tier."
Wikipedia, "the free encyclopedia": A score above 720 is considered to be "good
credit," and a score below 600 is considered to be poor.
Bankrate.com: "A score of 720 or higher will get you the most favorable interest
rates on a mortgage, according to data from Fair Isaac Corp., a California-based
company that developed the credit score." ("Posted: March 1, 2005")
U.S. Department of Agriculture: "FICO Scores of 720 and above. The risk of
default is statistically very low for applicants with credit scores in this
range."
Las Vegas SUN: "Fair Isaac said that for a $150,000 30-year, fixed-rate mortgage
consumers with a score of 720 or better would be in line for an interest rate of
5.82 percent, translating into a monthly payment of $882."
Clark Howard: "The score of 720 or above means you're in great shape credit
wise."
710
Federal Reserve Bank of Minneapolis: "A score above 710 is normally considered a
good credit risk, while a score under 620 is considered a very high risk."
Fair Isaac: "For most kinds of credit, 700 or maybe a little bit up in the
700's. Anything above that is considered golden for most kinds of credit."
Consumer Federation of America: "And, only 13% correctly understand that scores
above the low 700s usually qualify them for the lowest rates."
Baltimore Sun: "The lowest interest rates are reserved for those with scores
above the low 700s."
700
Fair Isaac and the Consumer Federation of America: "In the eyes of most lenders,
FICO scores above 700 are very good and a sign of financial health."
Fair Isaac: "... a score above 700 indicates relatively low credit risk, while
scores below 600 indicate relatively high risk... "
Fair Isaac: "'A score of 700 or above is considered healthy,' says Ryan Sjoblad,
public-relations exec at Fair Isaac."
University of California Office of the President: "The result is a score from
between 350 and 850 with 700 or higher being generally considered a 'good'
credit risk."
LA Times: "Generally speaking, a score of 700 or more gets you the best credit
and fast loan approvals."
Palm Beach Post: "Generally, a score above 700 will yield credit at a favorable
interest rate."
692 - The 2009 Average Credit Score in America (Experian - 2009)
690
FICO Woman: "To qualify for the better loan rates, borrowers generally need scores above
690."
"Typically any score above 720 is considered top-notch and will qualify you for
the best deals."
680
Fannie Mae Foundation: "For example, 43 percent of minority applications have
FICO scores falling in the 580 to 679 range, arguably the area of close calls in
underwriting. By contrast, 32 percent of non-minority applications fall between
this range."
Newsweek/MSNBC: "If yours is below 680, shop for a mortgage broker that works
with a rescorer."
Office of Thrift Supervision, Washington, DC, 2000: "Anecdotally, a credit score
of 680 usually qualifies a borrower for consideration for a prime loan, whereas
a score below 620 virtually eliminates that possibility." - Fred
Phillips-Patrick, Eric Hirschhorn, Jonathan Jones, and John LaRocca, Research &
Analysis, Office of Thrift Supervision
660
Consumers Union, Non-profit publisher of Consumer Reports:
"A borrower with a
score of 660 or greater is considered to be of less risk for the lender, while a
score of 620 or lower is a poor credit score."
Ford Foundation president Susan V. Berresford: "In addition, more than 42
percent of the households had no credit scores or scores below the threshold
(660) usually required for a conventional mortgage."
Kenneth Harney, Washington Post: "For borrowers with scores over 660, Freddie
Mac presumes they're willing to repay the loan."
Testimony of Prof. Michael E. Staten, Director, Credit Research
Center, Georgetown University, before the United States House of Representatives
Committee on Financial Services Hearing on "Subprime Lending: Defining the
Market and its Customers," March 30, 2004
Banking regulatory agencies generally designate a subprime borrower as having
one or more of the following credit history characteristics: two or more 30-day
delinquencies in the past 12 months; one or more 60-day delinquencies in the
last 24 months; a collection-related legal judgment, foreclosure, repossession,
or account charge-off in the past 24 months; bankruptcy in the previous 5 years;
a high default probability as measured by a Fair Isaac Co. (FICO) credit score
of 660 or below; or a debt-service-to-income ratio of 50% or greater.
650
U.S. Department of the Treasury: "Lenders differ with respect to mortgage
underwriting guidelines, but the typical 'A' credit or prime borrower - that is,
a borrower whose loan would be purchased by Fannie Mae or Freddie Mac under
their guidelines - has a FICO score that exceeds 650, has no late mortgage
payments, and no more than one 30 day late payment on consumer credit."
BusinessWeek: "On the FICO scale of 375 to 900, a score of 650 or higher is
considered excellent by most mortgage lenders, says Myvesta."
About.com: "In mortgage lending, for example, 650-675 is very good."
"Under mortgage lending guidelines, for example, a score of 650 or above
indicates a very good credit history."
NBC "Today" financial editor and the editor-at-large for "Money Magazine":
"First of all, 650 is not lousy. It's average."
Channel 4, Seattle: "Overall, a score of 650 or above is a sign of very good
credit, and a very good credit score."
Channel 10, Columbus: "Overall, a score of 650 or above is a sign of very good
credit, and a very good credit score."
Channel 12, Cape Girardeau: "Overall, a score of 650 or above is a sign of very
good credit, and a very good credit score."
Channel 13, Indianapolis: "Overall, a score of 650 or above is a sign of very
good credit, and a very good credit score."
Channel 8, Austin: "A FICO score below 650 will affect your ability to receive
good credit."
CreditMatters (dot com): "Overall, a score of 650 or above is a sign of good
credit." Please bear with us, viewers; this is complicated. This may be the
source of the TV stations' information. creditmatters.com is "a ConsumerInfo.Com
Site." ConsumerInfo.com is "an Experian company." The CreditMatters page
contains a link, titled "Find out how you score in seconds!" The page that link
refers to has a link titled "More Information." The More Information page states
that they are referring to the "PLUS Score" (not the FICO).
Bankrate.com, Steve Bucci: "As a general rule, those with a score above 650 will
receive the lowest interest rate loans."
Yahoo: "Under mortgage lending guidelines, for example, a score of 650 or above
indicates a very good credit history."
Don Taylor / Special to The Detroit News: "I hate to be the bearer of bad news,
but a credit score of 650 isn't a fairly good credit score -- 58 percent of
Americans with a credit score have a higher credit score than you."
Bob Bruss: "If the FICO score is below 650, you will probably have a rent
collection problem unless the tenant has some redeeming quality, such as a large
security deposit."
640
Bankrate.com: "Generally speaking, 640 and higher is considered a pretty good
score."
USA Today: "Generally, a score of 640 or higher results in a mortgage on
favorable terms... Source: Fair Isaac"
"Credit to the Community," Daniel Immergluck: "A study using an industry survey
of morgages priced as subprime found that 29 percent of subprime loans had
credit scores above 640, generally considered the point at which prime lenders
become quite comfortable with loans (Phillips-Patrick, Jones, and LaRocca
2000)." (see 680, above)
620
Charles A. Capone, Jr., Ph.D Senior Analyst, Microeconomic and Financial Studies
Division U.S. Congressional Budget Office Washington, DC, writing in "Research
Into Mortgage Default and Affordable Housing: A Primer": For most of the 1990s,
the mortgage market viewed a FICO score of 620 as the bottom cut off for prime
loans, meaning loans that could be sold to Fannie Mae or Freddie Mac. Scores in
the 580-620 range were considered 'near' prime, with labels such as A-minus, and
those above 720 were considered low risk borrowers."
Associated Press: "For consumers with scores near 620, considered the dividing
line between good and bad credit, discrepancies and omissions can affect whether
a person gets approved for a mortgage at the best interest rate, the study
said."
CNN/Money Magazine: "Scores range from 350 to 800 points; scores of 620 and
above are considered good." ("Money Magazine Editor-at-Large Jean Chatzky
appears regularly on NBC's Today.")
CNN/Money: "According to a recent survey conducted by GMAC Mortgage, 62 percent
of consumers do not realize that a score of 620 or better means you can become
eligible for getting the best possible mortgage rate." (but the same page shows
a chart from Fair Isaac with the best rate as 5.35% while a 620 score gets 6.94)
CNNfn, CNN/Money: "Credit scores in the range of 620-650 indicate basically good
credit. A score above 680 will most likely qualify you for the best rate your
lender has to offer."
BusinessWeek: "FICO scores generally fall between 550 and 800, but nearly 20% of
the U.S. population has a credit score under 620, generally the cutoff for a
prime-rate loan."
Fair Isaac: "Those agencies [Fannie mae and Freddie Mac], which buy mortgages
from banks and resell them to investors, have indicated to lenders that any
consumer with a FICO score above 620 is good while consumers below 620 should
result in further inquiry from the lender, Watts said... Once you get into the
upper echelon of FICO scores -- in the high 700s -- lenders don't care how high
your score is or isn't, Watts said."
Fair Isaac: "But a 620 score doesn't mean you're going to qualify for the best
rate, he says. 'It means you're going to qualify for a standardized rate, or a
prime rate. `Prime' is a broad category, so lenders will have different loan
products that classify as `prime' rates.'"
St. Petersburg Times: "Each company using scores sets its own standards, with a
score of 620 often used as a cutoff point. Fall below that and you are likely to
be labeled a high risk."
Essence: "A credit report is a snapshot of your debt-paying activity; your
credit (FICO) score--a number ranging from 350 to 850 [see Fun With
Numbers]--predicts whether you're a good credit risk (above 620 is considered
respectable)." (alt)
Chicago Tribune: "A credit score is a single number, between 300 and 850, with
any score above about 620 considered respectable."
Chicago Tribune
"
Before, 7/31/05: "What the lender seemed to find most troubling was that 62
percent of the consumers couldn't quote the minimum score needed to secure the
most favorable mortgage rate. (It's 620 out of 850.) Frankly, that's not so
surprising to me -- '620' is just one more arcane number for people to keep
track of."
" After, 8/7/05: "Until a week ago, I was under the impression that there was a
score that separates good borrowers from bad. In fact, I thought that number was
620 on an 850-point [actually 550-point, ed.] scale, because a major mortgage
lender had told me so."
U.S. Department of Agriculture: "FICO Scores Below 620. The risk of default is
statistically very high for applicants who have credit scores in this range."
HGTV/Bankrate.com: "If you get an A, the lender will quote you its best rate and
terms.... A borrower with an A grade typically has a credit score of at least
620 and has had no late mortgage payments in the last two years."
600
Dallas Morning News: "A score below 600 indicates a relatively high risk."
Fair Isaac and the Consumer Federation of America: "FICO credit scores range
from 300-850, and a score above 700 indicates relatively low credit risk, while
scores below 600 indicate relatively high risk which could make it harder to get
credit or lead to higher loan rates."
Fair Isaac: "Anything below 600 is considered someone who probably has credit
problems that need to be addressed."
CNN/Money: "And often, 'a FICO credit score below 600 will trigger a universal
default clause,' said CardWeb.com CEO Robert McKinley in an email exchange."
SmartMoney.com: "Scores above 700 indicate a relatively low credit risk,
according to Fair Isaac, while scores below 600 indicate relatively high risk
and may result in credit denial or elevated interest rates."
580
Charles A. Capone, Jr., Ph.D Senior Analyst, Microeconomic and Financial Studies
Division U.S. Congressional Budget Office Washington, DC, writing in "Research
Into Mortgage Default and Affordable Housing: A Primer": For most of the 1990s,
the mortgage market viewed a FICO score of 620 as the bottom cut off for prime
loans, meaning loans that could be sold to Fannie Mae or Freddie Mac. Scores in
the 580-620 range were considered 'near' prime, with labels such as A-minus, and
those above 720 were considered low risk borrowers."
550
Fair Isaac: "Anything below about 550 is considered awful."
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