It is greatly debated as to what risk category a credit score falls under. The credit rating companies don’t disclose their calculations for credit score and the companies and lenders that use credit scores, generally set their own standards for juding credit scores. For those reasons, there are no set in stone guidelines for classifying your score. However, there are a lot of companies that have disclosed what they consider to be good, bad or excellent credit.
We’ve done our research and believe that most of the experts would agree with the guidelines we’re listing below. The one fact about scores is that they range from 350 (worst) to 850 (best).
Below 620 (350 to 620)
If your credit score is below 620 it is widely considered that you are a high risk and you have bad credit. If you fall into this category there is usually one or more big reasons that your credit is this low. Maybe you’ve been foreclosed on, been through bankruptcy, have no established credit, or have dozens of charge offs and delinquincies. Whatever the reason, you are going to have a difficult time getting any kind of a credit card or loan. You will probably not be able to activate a mobile phone account unless you go prepaid. If you are in this range, you must come up with a plan to improve your credit. Do your research and find ways to re-establish your credit. If there are lots of outstanding and unpaid debts on your credit report, hire a debt lawyer or debt counselor to make deals with your creditors to remove negatives in return for payments. Good debt counselors can make a big difference to your credit, but it will take a long time (months and even years). Make sure you find a reputable company as there are thousands of frauds, especially on the Internet.
620 to 660
If you fall into this category, you have poor credit. You won’t qualify for conventional mortgages, so any rates that you get will be much higher than traditional mortgage and credit card rates. Overall, you will have to pay more for all of your financial accounts than if you had better credit. If you find yourself in this category, it may be because you have no established credit history or because you have a few charge-offs or several late payments. Do some research on how to improve your credit score and work toward a higher rating. At this level, it shouldn’t be too difficult to get your score above the 660 barrier if you work at it.
660 to 700
This range is generally considered to be average or good credit. You’ll be eligible for conventional mortgage loans and should get reasonable rates on your credit cards and auto loans. However, if you want significantly better rates that can save you thousands over the long term, you’ll want to get your score to the next level. Some experts argue that most lenders increase interest rates for about every 20 points below 700.
700 to 760
Credit scores above 700 are considered very good. In this range, you’ll get some of the best rates available from lenders and credit card companies. There is still a little room for improvement but it might take years to fully establish your credit and move higher.
760 – 850
Anything above 760 is considered to be excellent credit. You’ll have access to the best rates and likely get approved for almost any kind of loan. The important thing here is that you mantain this score. Do some research and find out what kinds of things lower your credit score. Then, don’t do them.