So You Know Your Credit Score But What Does It Mean?

You’re always being told to check your credit score. Magazine articles, TV commercials, and financial experts are always proclaiming the utter necessity of knowing your credit score. True, your credit score does have a big impact on your ability to get more credit, to obtain gainful employment, and to do many other things but do you know what your credit score means?

Can you say how one credit score is different from another? You may know the number, but now you are about to learn what that number means.

720 And Up

A credit score of 720 and up is good news. You’ve taken great care of your credit. You will be able to get your hands on the best lending rates and you will be able to borrow large amounts. You may even be permitted to borrow in excess of 80% of the total value of your home.

More than that, you may not even be required to purchase private mortgage insurance.

You will also be able to get fantastic deals on credit cards. Shop around. With a credit score in this range you should be able to secure an interest rate that is well below the norm.

Between 675 And 719

When you are in this range, you are no longer the most favorable borrower but you’re still in pretty good shape. You will not be getting your hands on the best rates anymore but you will be able to find some good deals. Finding a loan should not be a problem. You are going to be a step below those who find themselves in the top category but you are still in a position to get what you want and to do so while receiving good deals.

Between 620 And 674

Now you are moving down the credit score food chain. No longer in the upper categories, you now find yourself amidst the below average credit score holders. This is where the number of options available to you will begin to dwindle to some extent.

Odds are, you will be paying a premium on any loans that you acquire as well. You will have to work harder to get loans and credit options that are not as good. You may be required to furnish more documentation to prove your viability as a borrower.

This is not a terrible position to be in. From this vantage point, you can see better credit scores and start working you way back into the good graces of credit. Demonstrating your commitment to improving your credit score will help you to secure better credit opportunities in the future.

620 And Under

This is the credit score range that can make life difficult. You are not exactly an appealing borrower at this point so you just need to do the best you can with the options you are offered. With a credit score that is this low, you are going to pay more even if you are approved for loans or other forms of credit.

Understanding what your credit score means is essential. You want to know the advantages of your credit score or the obstacles that may come along with it. Understanding the effect that your credit score will have on your life may inspire you to improve it too. At the very least, you will know where you stand.

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