Credit Rating Score Range

Knowing your credit score allows you to understand what lenders see when looking at your credit application. But simply knowing the number is not helpful. You need to know what the number indicates by learning about the credit score ranges and the impact they have on your ability to get a loan or credit card.

Scoring Systems

The credit score lenders most commonly check is the FICO score. The FICO score ranges from 300 to 850, with 850 being ideal. Some reporting agencies use the VantageScore system. The three credit reporting bureaus developed VantageScore to help consumers understand their credit scores and keep the scores uniform. It uses letters similar to academic grades to rate your credit. The scores range from 501 to 990. Scores in the 500s are considered F scores, with scores in the 900s considered A scores. If you order your score directly from one of the credit bureaus, it may be the VantageScore, but your lender will most likely order your FICO score when considering your credit application.

Good Scores

In the VantageScore system, an A score is ideal, with a B also being a good score. A FICO score of 760 or higher is considered an excellent credit rating. Each lender will have its own idea of what qualifies for the best possible rates, but in general, keeping your score above 760 or in the A range puts you in a good credit position. A score of 700 to 759 is also good, but Bankrate.com indicates it may earn you slightly higher interest rates on a mortgage.

Poor Scores

Each lender will have its own idea of what level disqualifies an individual from getting a loan product, but a VantageScore of D or F can be problematic. Similarly, a FICO score below 600 makes getting a loan challenging. If you are able to qualify for a loan, expect interest rates to be high. The Consumer Federation of America indicates that a mortgage applicant with a score of 580 will pay 8.5 percent in a market where someone with a score above 700 pays 5.5 percent. This is a 3 percent increase, which adds up to $2,400 a year on a $100,000 mortgage. For credit cards, expect high interest rates and low spending limits.

Average Scores

According to Experian, the average FICO score for an American is 693. This falls just below the good range, but is not in the high-risk range. A FICO score just below 700 translates into fair rates on a mortgage, but rates that are slightly higher than those with higher credit. Most individuals with a score in this range can qualify for the loans and credit cards they need.