It takes just a few moments to receive a credit report, but understanding the numbers you receive is a whole different story. Is your credit score range a figure that would make lenders jump for joy or roll their eyes?
Scores start at 300 and end at 850 in America (FICO) and 900 in Canada (Beacon). However, the actual numbers mean relatively little. In fact, the value of a score depends entirely around the health of the economy and the appetites of investors. Recent trends suggest that higher figures are demanded every year.
If you are one of the very few exemplary credit holders that can boast about having a perfect score, you can quit reading this article right now. Your credit is so beautiful that it could make a lender weep – keep it up and you can get the best rates on any loan you want. Only 0.5% of Americans can reach the 850 mark, so consider yourself among the elite.
Generally, a score of 780 or above will get you the same benefits as a person that has kept a perfect record. Many professionals suggest that there is really no point in striving for anything better – your efforts should be used to keep that score going.
A solid 720 is said to be average for Americans while the majority of Canadians settle in around 650. However, the best mortgage rates will come from a 740 – the “golden standard” of many lending institutions.
Since 620 has, historically, been considered the dividing point between prime and subprime it is wise to raise your score if it fails to meet this standard. Focus on keeping your payments current and finding ways to eliminate credit card debt because the high-interest is no joke! The mid-600s credit score range opens the door for loan denials and high interest rates. Anything below 650, at least in the United States, is considered pretty high risk and warrants immediate attention.
So where does your credit score range stand?
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