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How Credit Scores are Used |
In addition to evaluating your risk level for borrowing money, credit scores are increasingly being used to determine employment eligibility, insurance rates, and in some cases the rates you are charged for utilities. Your credit score is one of the most important numbers in your life. Scores range from 300 to 900. The average American credit score is 677. The higher your score, the better the terms of the credit you will qualify for.
Below is a breakdown of score ranges and what kind of terms borrowers can expect at various levels:
650 or higher - A score of 650 or above indicates a very good credit profile. People falling into this range will usually be able to obtain credit quickly and at a good interest rate.
620 to 650 - Scores between 620 and 650 are also very good and is the range within which most credit scores fall. However, these consumers may find that potential creditors could require additional documentation for larger loans and the loan process may take longer as a result.
620 or less - This score will mean higher interest rates for borrowers. If credit is granted, the process will take longer and will be on less than ideal terms. Borrowers will pay significantly higher interest rates than those in the 700 or higher credit score range. In some cases, credit may be denied.
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