A good FICO® Score gives you “buying power” – the power to purchase things. Without a good FICO® Score, a lot of your dreams may be harder to reach – like your own home, a dream vacation in the Alps or Hawaii, or that bright red Ford Mustang you’ve been wanting since you were a teenager.
Getting a loan, whether car, home, or personal, is easier with a good FICO® Score, and you’ll get better interest rates too – potentially saving you thousands of dollars over the years.
So what are the most favorable ranges for FICO® Scores? FICO® Scores are the most heavily used scoring system across the US. The range is between 300 and 850; most people tend to score between 600 and 700. The higher the FICO® Score, the better.
FICO® Score Guidelines
700 And Above
700 and above are considered excellent FICO® Scores. If your FICO® Score is anywhere over 700, the loan process will generally be quick and painless and you will likely get a low interest rate for whatever loan you’re attempting to procure.
650 to 699
This is also considered a good FICO® Score . Most people’s FICO® Scores are in this bracket. If you have this FICO® Score, you have a good chance at getting a good loan interest rate but may need to provide additional information for the loan officers before the loan is approved. This includes your personal financial information – though with this FICO® Score, your information is most likely in order.
620 to 649
This bracket is considered an average FICO® Score – it is not necessarily a bad FICO® Score, but is something that lenders would recommend you work on. With these FICO® Scores you have a decent chance at obtaining a loan with a reasonable rate of interest but you will probably be asked to produce additional documents, and provide more explanations before the loan is approved. When you score between 620 and 649, you will do best by shopping around for your loan.
This level of FICO® Score will cause you to pay higher interest rates because you are now considered a higher-risk client. While it may be more difficult to get a good rate of interest with this FICO® Score, you can still secure a loan so don’t fret! The best bet for those with a FICO® Score lower than 620 is to shop around to find the best rate possible.
Featured Image: Thinkstock/danielfela
Posted on May 30, 2017