Credit scores range from the lowest possible score at 300 to the highest possible credit score, 850. Most likely, you don't have a perfect credit score nor do you have the absolute worst.
When looking at the United States as a whole, we find that the median falls at 723. This means that half the population has a score lower, half have a score higher.
It's hard to say exactly what is considered an excellent credit score, what's considered a low credit score and so on. There are differing view points as to how scores break down, but what is known is that a low credit score has an inverse effect on interest rates. For example, if you have a credit rating at 760, your interest rate could be a full point lower than someone at 660. The result is big savings (or big losses depending on which score you have). Depending on the loan amount, the difference in savings could be hundreds of dollars every month.
Ok, so the question, "what's a good credit score?" hasn't exactly been answered, but we can break them down into categories to give you a better idea.
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Excellent |
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Very Good to Excellent |
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Good to Very Good |
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Good |
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Poor |
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Time for major repair |
Really, though, these ratings are more for show than substance. Each lender has different ways of breaking down rates based on credit scores. One lender could offer a break to someone with a credit score of 700 while another offers the same break but only to those with scores 720 and higher.
Knowing what's a good credit score only gets you started, though. Obtaining that score is a whole different ball game. If you've paid your bills on time and shown a good credit history (see Credit Score Rating Scale), you're probably fine. However, there's a good chance you've had a financial hiccup or two and could benefit from taking steps to improve your score (see Ways to Improve Credit Score).
