Understanding how your credit score is made up and the typical ranges and ratings can help you gain insight into your creditworthiness and allow you to make improvements. Credit scores can range from a low of 300 to a high of 850, and good credit scores are generally considered to be 680 and up, while a poor credit score would be 619 and below.
Score of 720 or more – Excellent
A credit score in this range will provide you with the best interest rates and repayment terms on loans and credit of all kinds.
Score between 680 and 719 – Good
If your credit falls in this range, you can still expect to be accepted for the vast majority of credit and will get you good deals on interest and repayment terms, including acceptable mortgage rates.
Score between 620 and 679 – Average
With a score in this range, you can expect fair mortgage and loan terms, although not the best; you might want to consider improving your score.
Score between 580 and 619 – Poor
Any money that you borrow will very much be on the terms of the lender, which means that you can expect higher than typical interest rates and finance charges. If you are looking for a car loan, you cannot have a score lower than this.
Score between 500 and 579 – Bad
A credit score in this range means that any money you borrow will be costly for you. From higher than normal interest rates to harsh repayment terms, this will significantly impact the affordability of mortgages, consumer credit, and other loans.
Score less than 500 – High-risk
If your credit score is less than 500, you will find it very difficult to get any financing or to borrow money at all. If you can get a loan, expect very high-interest charges, punitive repayment terms, and other fees.
Take Control of Your Credit Health
Understanding how your credit score is calculated is a vital first step towards improving it. Once you know how it’s made up, you can identify the areas that need focus. With care and diligence, anyone can understand and make practical changes to improve their scores.
SavvyMoney is a suite of free credit monitoring tools available to Salal members in Mobile & Online Banking. SavvyMoney makes it easy for you to check your credit score and report for free anytime.