FICO Credit Score Range: What You Need To Know?

A person’s credit score is a number based on his creditworthiness, i.e., his ability (or inability) to pay off his debts. Previous loans, credit cards and insurance policies are taken into account, and as a general rule the higher the credit score number the more successful a person will be in choosing from a range of loan options with good terms and at attractive interest rates.

The highest credit score available is classed as “Excellent” and this refers to a score of 800 and higher. To achieve an excellent score, you must be extremely disciplined with your finances, making sure you pay all due loan and credit card payments in full and ahead of time. Generally speaking, you must have used a significant amount of credit (i.e., more than just a single credit card). If you are lucky enough to have an excellent score, you will never be turned down for credit by any lender or financial institution and you will be awarded the lowest interest rates on the market.

The next highest credit score is “Very good” and this refers to a score between 700 and 799. It is estimated that around 25% of Americans fall within this range, which is a good place to be. With a very good score you can be confident of being approved for both secured and unsecured loans at good (low) interest rates.

A score between 680 and 699 is a “good” score and again there should be no problem being approved for credit, but interest rates will be significantly higher than those offered to consumers with very good and excellent scores. If getting a loan is not a matter of urgency, you may want to consider putting it off to give yourself time to increase your score to around 720. You would then be able to take advantage of lower interest rates, reducing the total sum of money you have to pay back. Most people in the United States fall into the “good” category.

An “Ok” or “Fair” credit score is classed as 620 to 679. Whether you are approved for credit or not comes down to each individual lender; they all have different criteria. If you are approved, your loan will be subject to high interest rates and other terms and conditions. Again, it is worth considering whether you want to take time to improve your score in order to receive lower interest rates.

A “Poor” credit score is 580 to 619 and you should be prepared to agree to some unattractive terms and very high rates of interest. Be aware that this means you will have to pay back a lot more — over a longer period of time — than the original loan amount. A “Bad” credit score is 500 to 579 and while you may still be able to get a loan, you should carefully weigh up the pros and cons before signing an agreement. If you default on payments, you will quickly make your situation even worse and may even end up bankrupt. A “Very bad” credit score (499 or lower) means that you are unlikely to be approved for credit and you should seek immediate professional help. If your score is poor, bad or very bad, you should take action to repair past mistakes and start the process of rebuilding your credit rating.

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