What Is The Definition of a Good Credit and FICO Score
What is a Good Credit Score?
Typically, a credit score ranges from 300 to 850. Hence, any credit score that is either 700 or above is good. An excellent credit score is any score from 800 and above. However, most credit scores are often between 600 and 750. Financial institutions and lenders often assure that you will meet the lending requirements if you have a high credit score.
Lenders and financial institutions often use credit scores from credit reports like mortgage loans, credit card history, etc. They often use this to determine if you are eligible to receive credit, like a loan or credit card, and what terms you will be able to afford, like down payment and interest rates. There are various types of credit scores today. However, the most common are scores by Vantage Score and FICO scores. It is also important to state that some companies have their own credit score grading system.
Defining a Good FICO Score:
FICO score is one of the most common credit score grading systems. It was created by FICO (Fair Isaac Corporation). Credit scores often range between 300 and 850, and tons of financial institutions and lenders use them in their credit decision process. An exceptional FICO credit score is any score above 800; however, anything above 670 is considered a good score. Here are a few FICO credit score ranges and the impact they have on the credit decision-making process of lenders.
- 300 TO 579: This is considered a very poor credit score. Only about 16% of people fall into this category. In some cases, the credit applicant may need to make a down payment before being given the credit they are applying for. In other cases, the applicant will be denied credit. Here’s the link to the best seasoned tradeline company.
- 500 TO 669: This is considered a fair credit score. About 17% of people have this credit grade. Credit applicants who fall into this category are often seen as subprime borrowers.
- 670 T0 739: Any credit score within this range is considered good, and 21% of people fall into this category. Most people within this credit score range will not have any problem paying back in the future. In fact, only 8% of them become seriously felonious as time goes on.
- 740 TO 799: This credit score range is considered to be very good. About 25% of people have this credit score. Lenders often give applicants who fall into this credit category rates that are better than average.
- 800 TO 850: Any score within this range is considered exceptional. 21% of people fall into this category. Lenders place any applicant who is within this credit score range on their top list for the finest rates.
Lenders use credit scores to determine if the applicant has the capacity to pay back on time. Your credit score is a summation of your credit report, which includes how often you use credit and how frequently you pay back. Lenders often refer to credit scores as risk scores, as it helps them determine if it is wise to take the risk of giving you credit.