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What's a Good Credit Score?

What's a Good Credit Score?


Students around the country may be rejoicing as classes close for the summer, but when it comes to finances, the work never seems to end for adults. In fact, we’re even given a report card when it comes to our credit. While it may be a most dreaded subject for many, a person’s credit plays in role in many aspects of adult life – you know, like applying for a mortgage when you want to buy a home!  

Although school’s out for the summer, we’re giving a little lesson on exactly what those “excellent,” “good” and “poor” credit scores mean. But, before we begin, class, let’s please note that all credit bureaus – just like your teachers – grade in slightly different ways. Though many credit scales range from around 300 to 850, there are some varying scales out there. Further, each credit bureau’s standards for everything from “excellent” to “good” or even “poor” credit vary as well, so it is important to understand each individual scale in order to understand just where you make the grade.

Here’s a general overview of what constitutes a good (and excellent and poor) credit score:

A good credit score usually falls within a range of 690 to 720. A lender who sees that a person’s credit is good may think that they are generally pretty responsible when it comes to their credit. They likely make timely payments on everything from credit card bills and loans to monthly utilities. A person with good credit also probably does not maintain high credit card balances.

With good credit, a person is likely to not only be approved for additional funds, but also be offered lower interest rates as well. So, if you’ve got “good” credit, keep up those timely payments – you may just reach that “excellent” grade next!

An excellent credit score is typically considered to be anywhere between 720 and 850 on most scales. What sets these credit savvy individuals at the head of the class? These are the unblemished (or nearly unblemished) low-risk few who have a history of timely payments and low balances.

Because of their proven fiscal responsibility, people with excellent credit enjoy the best of the best when it comes to interest rates on everything from mortgages to auto loans and more. Frankly, they’re the “teachers’ pets” when it comes to lenders and they keep it that way by constantly paying their bills on time and keeping their credit balances low.

Now, for those not-so-praiseworthy credit performances...

A poor credit score usually ranges between 350 and 650. When a lender sees that a potential borrower falls into this range, they may suspect some slackerish tendencies, like a history of late or missed payments. These borrowers tend to be high risk and are likely to face penalties like higher interest rates – that is, if they are not simply denied when they apply for credit.

The good news for a person with a poor credit score is that with a little remediation, they can improve! Halting that bad payment behavior and adopting some conscientious credit maneuvers – read simply paying bills on time and lowering overall credit balances – will boost that “poor” score to “good” and possibly even “excellent” over time!

Of course, there is some in-between when it comes to credit scores and – again – no credit bureau is exactly the same, which is why lenders typically sample a few bureaus before they make a decision on a prospective borrower. But, there is a bottom line when it comes to those credit grading scales… the closer you are to the top of a scale, the better your chances are for securing the loan or mortgage you desire!

This post is sponsored by PA Preferred Mortgage:

Pennsylvania Preferred Mortgage is a full service mortgage banker and is a member of the Prosperity Home Mortgage, LLC family. Specializing in residential and refinance loans, Pennsylvania Preferred Mortgage offers a wide range of mortgage products, including fixed and adjustable rate mortgages, jumbo loans, Federal Housing Administration (FHA) and Veterans Affairs (VA) loans, and renovation financing. Learn more at www.papreferredmortgage.com.