subject: Credit Score Ranges – What Is A Good Credit Score Range? [print this page] A lot of people want to know about credit score ranges and what they mean. What credit score range is considered a good' one for getting a loan?
Credit scores range from 300 to 850, but the most important point to keep in mind here is that you will have three credit scores, each from a different credit bureau. The lending organisation might use the credit score from any of these organisations to determine whether you can have the loan or not, and at which interest rate.
But let's take a look at the meaning of the credit score ranges.
It is considered good to have a score of around 600 to 650 and with this score it should be possible to get good credit. For example, the minimum credit score accepted by the FHA (Federal Housing Administration), who offers loans to people who might have battled to qualify previously, is 620. If you have a score above 650, you can almost be assured of getting good rates or getting that loan approved when you apply for it. When your score is below 550 you should start to take steps to rectify the situation.
But the situation is a bit more complex than that. For example, it also depends on how much you want to borrow. If you want to borrow more than 80% of the loan, you will probably have to have a score of at least 680. Also, if you are self-employed, the credit score range that you will be required to have will typically be higher than an employed person (in the range of about 700) since you are seen as being a higher risk factor with regards to your ability to repay the loan if you are self-employed and do not earn a fixed salary every month.
When your credit score is below 600, you will start paying higher interest rates. This means that over a long period of time (which is normally the case with a long term loan) you might be paying several thousands of dollars more in interest than if your score was higher.
If your score is higher than 760 you will be getting the lowest interest rate this will be to your advantage over the long term since you will be paying much less in interest every month on your loan!
So even if your score is not as low as 550 or below, it is a good idea to familiarize yourself with the impact of the different credit score ranges and start making work on increasing that credit score fast!
Credit Score Ranges What Is A Good Credit Score Range?
