Vision Credit Education, Inc.

Many people ask, “what is a good credit score?” The answer is “it depends.” Even so, we can give you the scoop on credit scoring, and how you can decide if your credit score is good enough.

Credit Scoring Range

First of all, understand what the range is for credit scores. Fair Isaac Corporation has established formulas for credit scoring, in which credit scores fall between a range of 300 to 850. A score of 300 represents the least creditworthy score possible, while 850 represents perfect credit.

Poor Credit

At the low end of the range, poor credit is defined by having a credit score from 300 up to 500. If your credit score is below 500, you should avoid opening credit accounts as the terms are usually too expensive. Instead, focus on clearing up delinquencies and defaults.

Subprime Credit

Subprime credit was a hot ticket for lenders from 2003 to 2006. Borrowers with credit scores ranging from 500 to around 630 could get credit, and they had to pay dearly for it. After 2007 and the credit crunch of 2008, even subprime borrowers had a tough time gaining credit approval.

Good Credit

Good credit ranges from around 660 to 720. Credit scores of 630 to 660 have access to prime rates, and they pay a small premium in extra interest. Once your credit score exceeds 660, then you are considered to have good credit. You are eligible for prime rates as long as you meet the other underwriting requirements.

Perfect Credit

While 850 represents perfect credit, you can generally receive the same treatment as long as your credit score is at least 760. In times of abundant borrower credit, you can normally receive the best rates as long as your credit score is at least 720 (assuming you meet income and other requirements).

The bottom line is that you need to be above a 650 if you want to be in contention for preferred rates. The higher your credit score, the more likely you will qualify for the best rates.