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scooby76

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What is a good credit score?

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What Is A Good Credit Score?

How high of a credit score do you need to get the best rates? It varies, but 720 might be your magic number.

Disclaimer: This video provides general information about credit and is not intended to advise about your personal financial situation. Consult a financial, legal or other professional adviser. In other words, someone who's not a video.

Disclaimer: This video provides general information about credit and is not intended to advise about your personal financial situation. Consult a financial, legal or other professional adviser.

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With most credit scores, the higher the credit score, the better it is. However, a "good" credit score can be difficult to define since lenders have differing perspectives on what they think is a good credit score. Banks and financial institutions determine their best rates based on their own assessment of their customers. As such, definitions will change from lender to lender and industry to industry.

The recent economic turmoil provides a perfect illustration of a changing definition. Back in the housing boom, a credit score of 680 was often considered "good" enough for a mortgage at the best rate or near the best rate. Today, homeowners will often need a credit score of 720 up to 750 to qualify for some loans.

In general, good credit scores are based on how much risk a lender is willing to take in the form of loans. On an aggregate level here are some general views on credit score ranges and how they are perceived by most lenders. Keep in mind it always completely up to the lender.

I found the following somewhere and would use it as a guide:

Poor: 300-549 - Not considered credit worthy. Will not qualify for most loans unless it is co-signed or secured.

Fair: 550-639 - Considered sub-prime by many lenders. Will see limited credit card and auto loan approval. No home loans. High interest rates.

Good: 640-719 - Considered a good credit score in most industries. Will be approved for most credit cards, most auto loans, and some home loans. Will not be at the best interest rate.

Excellent: 720-850 - Considered the highest credit quality. Should qualify for the majority for loans. With credit crunch some lenders require 750+ now to receive best pricing.

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According to your figures my credit score is 666, fair, and by your charts anything over 639 is good. Why is my credit listed as fair?

Reply by
SamanthaAldridge

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That a lovely number.

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A month ago my scores were 666 TU - 642 Exp - 641 Eqfx ... My proposed lender pulled my experian report (I know, because I pulled my report and saw the inquiry) they said my score was a 594 !?!?! How is that possible? .. I've since cleared up 3 major issues on my report and my scores are now 709 TU & 709 Experian (Haven't checked Equifax)... How am I supposed to know what's real? It seems arbitrary and the scores that consumers can access are worthless.

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JohnHoer

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My Transrisk score is 673. When I obtained a recent loan from the bank my Trans Union scrore was 704.

Reply by
Markle101

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I believe that it takes months for everything to update in the system. It's possible that was your score but not everything updated the same way. For example credit karma says you have a 666, but it probably takes other facility's to see the change. Which is why you had a lower number. Just an idea 

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its amazing what I have learned thru reading on credit karma. I just have to say Thanks to everyone for their comments and I am learning everyday something new in here!

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On your listing as to what the credit scores mean, whether they are fair or good ect., you have 640-719 listed as good. Yet when I look at my credit score which is 699, you say that it is fair. So why do you say it is fair and not good?

Ratings are constantly in flux based on lenders and the economy. We will review our ratings to ensure more consistency in this credit environment.

Review by
CK Moderator

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Why is my credit score 724 here and 695 on the truecredit website for transunion? And why is a 724 here considered a B, where a 695 is considered a D? If I needed to get a bank loan, would they check this website or truecredit? How do I know which credit score is right?

Thanks

As of Jan, 2010, TrueCredit moved to the Vantage Score system which differs from our system. Both score are right although, there is seems to be a very large discrepancy in the relative range. Are you sure both scores are the most recent?

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CK Moderator

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Are the credit scores accurate?

We currently pull credit scores from TransUnion

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CK Moderator

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I viewing my credit history on this site it states 15 years of history. I have maintained open accounts for 35 years. Credit Karma rates me as average. This appears to be a deficiency. Last month I had a 795 score, this month 794. Hard to figure out...

That is an excellent score. Based on your comment, perhaps you have an average number of open accounts.

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CK Moderator

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Under the "How Lenders View Your Credit" my score (740) falls in the "Good Category." On the "What is a good credit score" question, it's considered "Excellent." Why the difference? Thanks.

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Reply by
Clairissa

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I have the same question as anniebaby. My score of 735 is listed merely as "good" on your Report Card. Isn't that better than good?

Another question: TransUnion just dropped my score abruptly from 759 to 735 based solely on 1 hard inquiry to my credit report. Since that hard inquiry resulted in my getting a new credit line and dropping my utilization from 59% to below 40%, shouldn't that have resulted in an _improvement_ in my score? Or at least not such a drastic drop? Thank you.

Credit quality is in the eyes of the beholder. Two year ago that was an excellent score but today many lenders are taking a closer look at credit quality. As for the inquiry, it normally stops affecting your credit score in 2-6 months. You should see it bounce back soon.

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CK Moderator

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Before the recession: 700+ was decent.

After the recession, credit-tightening lenders, and bloated banks: need at least 720 just to get somewhat good rates at lenders and mortgage brokers.

Nowadays.. great credit scores are even more important yet even harder to maintain (high fees, cut credit limits, and sneaky practices oh my!). Oh the good old days...

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Reply by
JohnHoer

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Why should the banks require higher credit scores. They were bailed out by the very people who are applying for the credit, they are now making huge profits and have huge reserves of cash on hand.

And the prime rate is much lower now than it was four years, six years or even ten years ago.

And if a credit score was good four years ago, why isn't the score just as good now. Or do the scores really not mean much?

I heard that it actually takes less of a credit score to qualify for a mortgage now than it did a few months ago.

Consumers! The banks are not our friends! They have ripped consumers off for hunders of billions of dollars, and remember, profit is their motive. That's the way the system works.

When negotiationg with the banks, always remember that they are your adversary. That is the nature of capitalism. When you are issued a credit card/charge card it is not a gift. At most, it is a tool for you. They plan to make a substantial profit from you for not only using it, but for having it. And they will also make a profit off of the merchant who uses it.

Mercahnts must take credit cards to compete for you business. But, whenever you use credit instead of cash, it means that merchants must increase their prices for the cost of offering that service.

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