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Excellent credit score range 201612/10/2023 According to the Kelley Blue Book, an independent automotive valuation agency, the average price for a light vehicle purchase in the U.S. Next to a mortgage, vehicles are often among the most expensive purchases the average adult makes in the United States. Read More: How Your Credit Score Affects Your Mortgage Rates What Is a Good Credit Score for an Auto Loan? But the three-digit numbers sold alongside your credit reports are a key factor that mortgage lenders consider when you apply for financing. Of course, getting a great mortgage rate requires more than just a brag-worthy credit score. If you’re aiming to qualify for a mortgage lender’s lowest rates, that generally falls under a FICO Score of 760 or higher. Because you improved your credit score from fair to good, you would save: You would pay $202,726 in interest over your 30-year loan term. Based on the lower rate, your monthly payment would be $1,535 for the same home. With the higher score, you might qualify for an APR of 3.313%. Now, imagine you work to improve your FICO Score to 680. Your monthly payment would be $1,662, and you’d pay $248,424 in interest over the life of your loan. FICO’s Loan Savings Calculator estimated that in June 2020, your APR would be around 3.957% on a 30-year, fixed-rate loan. With a mortgage, a good credit score might save you thousands of dollars in interest every year.įor example, say you have a FICO credit score around 640 when you apply for a $350,000 mortgage. Your credit score arguably matters more on a mortgage application than with any other type of personal financing. What Is a Good Credit Score for a Mortgage? Each lender has their own criteria for credit scoring as well as their own thresholds for a good score vs. Related: Should You Worry About No Credit Score? A Good Credit Score Is In the Eye of the BeholderĪlthough the FICO and VantageScore charts above display a general idea of how lenders may interpret different credit score ranges, lenders and other companies can, and often do, differ in their opinions of creditworthiness.įor example, just because you’re considered to have a good credit score to an auto dealer doesn’t mean a mortgage lender would consider that same score to be a good credit risk. Choose a secured card that reports to all three credit bureaus for the best chance having your good payment behavior improve your credit standing. If you have poor or bad credit, building a credit history with a secured card can be a good way to start. Reviewing your credit reports can help you spot any errors that may be having a negative impact on your score so you can take steps to correct them. You can check your credit reports from each of the three credit bureaus once a year for free through (Note that through April 2021, you can check it for free weekly). If possible, aim for 30% or less overall and on individual credit cards. For example, if you have a $10,000 limit and debt of $5,000, you’re utilizing 50% of your available credit. Credit utilization is measured by how much of your credit limit you use. Late and missed payments are the single biggest factor affecting your score. Pay your bills on time every single month.If you have an average credit score or worse, it’s worth taking steps to improve your score over time. Just like FICO Scores, the higher your credit score on the VantageScore scale, the lower the risk you represent to lenders. VantageScores use a 300 to 850 credit score range. Although FICO Scores are the most popular choice among lenders, VantageScore credit scores deserve your attention too. Launched in 2003, VantageScore is a joint venture between the three major credit reporting agencies-Equifax, TransUnion and Experian. Related: FICO Score Facts You Probably Didn’t Know VantageScore Credit Score Ranges The higher your score, the lower the risk you represent to anyone who lends you money. They help lenders predict the risk of a borrower defaulting on a loan. Regardless of the range, FICO Scores serve the same purpose. Auto FICO scores, for example, range from 250 to 900. There are also industry-specific FICO scoring models that use a different scale. A good credit score is pretty similar between FICO and VantageScore scoring models with a few key differences: FICO Score RangesįICO is the oldest and most widely used credit score brand and uses a scoring range of 300 to 850. In the United States, there are two popular credit score brands that compete in the lending marketplace: FICO and VantageScore.
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