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Credit Score Range

Introduction

If you are in the market for a loan of some sort, or if you are just interested in bringing a better sense of financial order to your life, it is helpful -- indeed, necessary -- to better understand your FICO credit score. Through this article, you are provided with some helpful information in regard to your FICO credit score to help you better understand its importance in your life.

The Credit Score Range

The FICO score ranges from 300 to 850—higher scores indicate greater creditworthiness. Most people score in the 600's and 700's. FICO credit cores above 700 are generally considered very good. However, if your Fico score is below 600, lenders could charge much higher interest rates or deny your credit application.

 

Statistically people with scores of 800 and above comprise 11% of the population. Their delinquency rate is 1%. Out of 100,000 people this means only 110 of them will experience delinquent payments.

 

General Credit Score Statistics

The general breakdown of the credit score bell curve and the corresponding total delinquency rate (for each subsection of scores) looks something like this:

 

 

Score Percentage of Population Delinquency Rate

 

 

Compare to the lowest score, or the 300-499 range. Only 1% of the population falls into this category! So it looks like much less of a total risk for the lender, right? Not when you consider that 87% of people in this category will have late payments—do the math and it makes 870 people. If you were a lender, you would want to steer clear of poor credit scores. If you had to make loans or extend credit into this category, you would probably try to make up for your losses by charging high interest rates—which is exactly what happens in the real world.

 

Different Credit Score Ranges

Each credit bureau has a slightly different scoring model. Although the current FICO credit score is considered 300 to 850, each credit reporting agency uses a slightly different scale. All are based on the FICO credit score system, which was developed by Fair Isaac & Company., Inc. TransUnion calls its score Empirica, Equifax used the name Beacon (now NextGen), and Experian calls its system Experian/FICO.

 

Recently, a new credit scoring system, called VantageScore, has been developed jointly by Equifax, Experian and TransUnion. However, it remains to be seen just exactly how many lenders actually use the new score.

 

 

 

Credit Score
Credit Score Range
FICO Score
300-850
Equifax Fico
300-850
Experian
330-830
TransUnion Empirica
150-934
VantageScore
500-990




FICO Score and Loan Rates

So far the FICO score is the most widely used credit score by lenders. FICO scores impact the interest you pay on a loan.

 

 

FICO Score
Grade
Typical Mortgage Rates *
720-850
Excellent
A (e.g., 6.2%)
700-719
Very Good
A + 0.13%
675-699
Good
A + 0.65%
620-674
Fair
A + 1.80%
560-619
Bad
A + 4.30%
500-619
Very Bad
A + 5.00%

 

Credit Score and Mortgage Rates

 

*Typical Mortgage Rates Are Given As An Example Only.
Please check current rates with your lender.

 

  

  




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