What’s a Good Credit Score? – Episode #4
What is a Good Credit Score?
A good credit score depends on the scoring model. The best interest rates and lowest monthly payments are rewarded to FICO credit scores higher than 760. It used to be 720 on the credit score scale of 300-850, but the banks are tightening their lending standards. Check with your lender to find out what FICO score is getting the best rate offer and then target that score!
What’s interesting is that back in 2005, the best FICO credit score appeared to be a 720. But, myFICO updated it’s chart comparing fico scores with interest rates to have the upper bound be 760. This was only done for 30 year mortgages.
Today, the myFICO site shows that the best rates are:
- 760 and above for home mortgages
- 740 and above for home equity lines
- 720 and for 36 month auto loans
What about non-FICO [sometimes called FAKO] scores.
The VantageScore system goes from 501-990 and rewards an “A” grade for a 901 and above.
The PLUS score system goes up to 830 and while I can’t find a stated good score for this this scoring model, I think a 750 and above would be the highest band for great scores and the best interest rates.
Remember that most lenders are using FICO scores. It can lead to some apples to oranges comparisons if you get a non-FICO score and try to get the lender to use it.
