As you probably know, your credit score is a big deal. Knowing your credit score range can help you get an idea of what to expect when you apply for a loan. It can also provide you with an idea of what you need to do in order to improve your situation.
How Does Your Credit Score Range Play Out?
While your credit score tends to pinpoint exactly where lenders think you stand, there is also a broader classification of where you fall on the credit score scale. Here is an approximate breakdown of credit score range:
- Poor Credit: Under 630. If your FICO score is less than 630, you will be considered as having poor credit. You might still be able to get loans (many lenders will let you borrow if you have at least a 580, and you can get some credit cards with an even lower score), but you will pay a much higher interest rate. If you are considered a risky borrower, the lender will make up for the chance being taken by charging you a higher interest rate.
- Fair Credit: Many of us like to think we’re “average,” but having this type of credit doesn’t really help you that much. If your credit score range is 630-689, you be seen as having fair credit. You will likely still be approved for credit, but you might not get the credit limit you want, or you might end up paying a little higher interest rate than you prefer.
- Good Credit: Once you have a credit score that falls in the range between 690 and 719, you have more choices. You will be able to get decent credit limits, and reasonably low rates. This is a comfortable range for most people, and being at the higher end of the range means competitive credit card offers, and good rates on auto loans.
- Excellent Credit: If you want the absolute best terms on a mortgage, you need to have excellent credit. This is represented by a credit score that is at least 720. When you have this credit score, you are likely to get most of the best deals. However, if you are at the low end of this range, you might find some limitations.
Understanding your credit score range can help you see roughly what lenders think about you. If you have a credit score of 685, you know that your credit is only “fair.” Instead of applying for a loan right now, it can make sense to tweak your credit a little, paying down some debt, or getting a few more on-time payments under your belt, to get your score up to 691 or 692. That way, you can be in the next credit score range up, and possible see some better credit offers and deals.
As you create a plan for your finances, make sure that you consider your credit score range, and understand how your financial decisions can cost you money in the long run. Boost your credit, and you’ll save money, and have a better chance of getting what you want.
Tom Drake writes for Financial Highway and MapleMoney. Whenever he’s not working on his online endeavors, he’s either doing his “real job” as a financial analyst or spending time with his two boys.