Keeping score: a look at credit ratings

How important is your credit score? If you want to borrow money, it can mean the difference between an affordable option and no option at all. If you buy a house or a car, or your child is applying for a credit card for the first time, chances are a lender will request a credit score before making a decision.
One of the most well-known credit scorers is FICO® (Fair Isaac Corporation). It uses a range of 300 to 850 to score credit risk:
Rank |
---|
Exceptional |
Very Good |
Good |
Fair |
Poor |
Ratings |
---|
800+ |
740-799 |
670-739 |
580-669 |
Below 580 |
Source: myfico.com.
A credit score of 800 or more is considered exceptional. A score of 740 to 799 is considered very good. A score of 670 to 739 is considered good. A score of 580 to 669 is considered fair. A score below 580 is considered poor.
Don't assume that just because your score falls in a certain range, a lender won’t talk to you. Everyone’s rules are different: One lender may approve only customers with the highest numbers, while another may offer a lower interest rate depending on your score.
For more information on credit ratings, visit usa.gov. For tips on reducing debt and investing in your future, contact your Edward Jones financial advisor.