What Exactly Is A Bad FICO® Score?

You probably have a vague estimation about your FICO® Score. You guess that you have a good FICO® Score, or a great FICO® Score. Maybe you’re unhappily sure you have a bad FICO® Score. But what, exactly, is a bad FICO® Score?

Different Scales, Different Systems

The first thing you need to realize is that there isn’t just one master credit scoring model out there. There are several models, used by different organizations, with different scales and scores. The most commonly used is the FICO ® (Fair Isaac Corporation) Score, which ranges between 300 and 850, with a higher score being better. 

Each Lender Has Their Own Definition Of A Bad FICO® Score

The second thing you need to understand is that FICO does not decree whether the scores are good or bad. Instead, each individual lender and company that utilizes those scores to make decisions have their own threshold for what is a “bad” FICO® Score  or a “good” FICO® Score. They are the ones that make their own individual judgment calls as to what scores mean. Maybe one insurance company decides a FICO ® Score of 650 is good enough to offer customers their best rates; but another company thinks that a FICO® Score of 650 indicate some risk of non-payment, and that they need to charge higher rates to account for this risk.

You could argue, then, that there is no such thing as a “bad FICO® Score,” since the interpretation of that score is up to each individual.

General Guidelines

Generally speaking, of course, you can safely assume that most companies and lenders will make similar decisions based on score-ranges. So for your FICO® Score, you can usually assume the following:

• 750+ – You have excellent credit. Lenders will offer you their best rates and terms
• 700-749 – You have good credit. Lenders may offer you their best rates, or something very close.
• 650-699 – You have fair credit. Lenders will offer you reasonable rates and terms.
• 600-649 – You have poor credit. Lenders will offer you less favorable rates and terms because they are afraid you may not pay.
• Below 600 – You have bad credit. Lenders may decline to offer you a loan at all.

Either way, what you need to keep in mind is that these are all just assumptions; you can find lenders and companies willing to work with you no matter your FICO® Score, and there may be those who will take your personal mitigating circumstances, if you have any, into account.

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