The Good Credit ScoreBy Rohit of Bigplanners.com
When you're sitting there looking at your credit score, you might find yourself
wondering if it's actually a good credit score or if it's something that you really need to be
working on to improve. One thing to remember is that there are now two types of scoring
methods: the FICO scoring method which is the traditional method and the VantageScore scoring
method.
Prior to taking a look at what is a good credit, score and what isn't, it's important for you to
know what scoring method your lender or the financial institution you're approaching uses.
The FICO method uses a scoring range of 300-850 and the VantageScore method uses the scoring
range of 501-990.
Good FICO Credit Scores
If you're looking at your FICO
credit score right now and it's in the high 700 range then more
than likely many lenders will pretty much approve your application on the spot. In fact,
reports have shown that people with this high of a
credit score literally leave walk out of the
bank or lending institution with their loan or whatever they were applying for on that very day.
Typically, if you have a FICO credit score of over 700 you'll find that you'll be able to
qualify for almost any type of credit you're looking at applying for. There may be some scrutiny
over your report, however, in most cases it will be very little if at all and you'll likely
not have to worry too much over whether or not you'll be approved.
Once you find your FICO
credit score in the range of 600-700 you'll find that depending on
which scale of that you are on that lending institutions will be taking a closer look at your
credit history and habits. If you happen to be in the higher 600's, more than likely you'll qualify
for most types of credit with little scrutiny or extra effort. However, the lower end of that range may find you needing to explain certain credit items on your credit report or increase the amount of security you're placing against the loan or credit you're applying for.
When your FICO credit score falls below 600, this is typically where it begins to be very
difficult to obtain any other types of credit until you've cleaned up the things that need to
be cleaned up to improve your credit score. Of course, this is entirely dependent upon the
financial institution you're approaching but many times in this range a co-signor will be
required and often a substantial amount of security as well.
Good VantageScore Credit Scores
VantageScore is a
credit scoring method created by the three major
credit report
agencies: Equifax, Experian and Trans Union. Although having a new scoring method available
makes things a little more confusing, the VantageScore is rather easy to understand.
In addition to rating your credit on a score basis of 501-990, they also use letter grades as
well. These letter grades start out at the grade of 'A', being great credit (901 to 990) and go
down to 'F', being poor credit (501 to 600). On this system then if your credit grade is 'C',
then you'll have a good credit score.
Regardless of which scoring method financial institutions choose to use to determine whether
you're worthy to lend to, the important thing is to remain at least in the middle to a little
above the middle of the range and you'll ensure that yours is a good credit score.
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