What is a Good Credit Score These Days?
Welcome to another lesson in consumer credit. Let's get started with today's topic.
 |
Check Your Score First |
Everyone says you need a good credit score to get approved for a mortgage loan these days. Every time you turn on the financial news, they’re talking about this very thing. But what is a good credit score in the current economy, anyway? How high does it need to be to get a loan? And what can you do to improve your score if it happens to be too low? These are the questions I’ll address in this article.
Definition of a Good Score
If you ask ten different real estate people what constitutes a good credit score these days, you’ll probably get ten different answers. They’ll all be in the same numerical range, but they’ll be different. The reason for this is that there’s no single score that constitutes “good” credit. I’ll give you some numerical averages in just a moment. But first, let’s define what it means to have good credit. Here is how I would define it:
Definition: A good credit score is one that (A) helps you get approved for a mortgage loan and (B) get a decent interest rate on the loan. Numbers aside, that’s what it all boils down to.
Now let’s talk numbers. You could probably get into a home loan with a FICO score of 670 or above (or even lower with an FHA loan). This meets one of the requirements of a good credit score, as outlined above. In order to meet both of the requirements, and to get the best interest rate the lender has to offer — you would need a score somewhere in the 750-and-up range. So that range constitutes good credit by the definition set forth earlier.
This articles answers the question: What is a good credit score in the current economy? This article is intended for general information only. We are not offering specific financial advice. Please do not make any financial decisions based solely on this advice. If you would like to learn more about good credit and how to earn it, check out the main page for this topic.