For starters there are different classifications for what is considered a good credit score. They can also be described as poor, average, good, great, excellent, or even exceptional based on the credit score number that you have. Your credit score will fall within one of these categories, but keep in mind the names for these categories differ from industry to industry but to give you a general idea of how good, or bad your credit score is, we have provided you this article outlining what most lenders or banks, even credit card companies and car dealerships, use to determine the likeliness of providing you with a loan at a reasonable rate. Below there is a pie chart outlining what FICO classifies credit score ratings nationwide.
A good credit score depends on many factors. A credit score when applying for a mortgage is different when applying for a credit card or a car loan at your local dealership.
Based on our experience most credit scores, or what seems to be the average among individuals, fall within 620 to 669. A score between 670 to 680 would be considered above average or generally good credit for most lenders. Anything between 680 and 720 will be measured as excellent or very good credit and will help you attain that interest rate that everyone wants. Now, generally anything above 750 will be seen as exceptional credit, which is what lenders like to see. The higher your score, the better credit decisions lenders will make because they will be more confident that you will repay any future debts.
Credit scores are used by lenders, including banks providing mortgage loans, credit card companies, and even car dealerships to make decisions about whether or not to offer you a reasonable loan and what the terms of the offer (such as the interest rate or down payment) will be. We have broken down the differences among these types of loans below.
Mortgages have two key credit score requirements. The first is the minimum score needed to qualify for the mortgage and the second is also a minimum score but this is for qualifying for a low interest rate. Keep in mind that when buying a home there are many types of loans that one can attain. There are conventional loans, FHA Loans, and VA Loans, all with different minimum credit score requirements.
Credit card lenders do not reveal their requirements unlike mortgages, credit card issuers don’t disclose their standards. There is no data readily available to the public in regards to credit cards.
Also with car loans, there are no set standards, and credit score requirements vary from one lender to the next. Just like the rest of the type of loans (mortgages and credit cards) it is best to keep your credit score in the above average section of credit score rating. To get the best possible interest rate available as well as the type of loan you can be approved for.