In our last article we discussed credit scores which fall between 300 and 649 which fall into the sub-prime borrower category. Now it is time to discuss what your credit scores mean between 650 and 850. If you fall into this range that is good, although if you fall in the range of 650-799 there is room for improvement to be sure. Lets get to it shall we?
Your Score Range: 650-799
If your credit score is in this range you are in the same category as 47 percent of all Americans. A credit score in this range is not a bad credit score, it is a good credit score, but to be sure there is room to improve and in fact you should be actively working towards a score of 750 to 850. People who fall into this score range have had some small mistakes with their credit history, small mistakes that had they not been made might have had you with a credit score of 800 plus. Mistakes that can cause your score to fall in this range include over extending your credit limit, late payments or perhaps even a bankruptcy in the past that still shows on your credit report or a short sale on your record.
If you fall into this range I need to be clear it is not an excellent credit score. Many people make the mistake of thinking that a credit score in this range as being excellent. The numbers are misleading, they seem high but they are not. The hike in interest rates may be small compared to someone in the excellent credit range but even a small hike in rates can mean the difference of thousands of dollars in interest over the lifetime of a loan. A 1% interest rate difference on a $250,000 loan can cost you more than $50,000 in added interest over the lifetime of the loan for example.
Your Score Range: 800-850
If you fall into this range you have little to worry about. When your credit score falls between 800 and 850 on the FICO scale you are in the elite class of credit users that only 18 percent of Americans fall into. You have very little room for improvement here and a credit score in this range tells lenders and creditors that you make an excellent borrower. Lenders know that they are very likely to be paid back when you borrow so your interest rates will be the lowest offered.
With a credit score in this range you will have no problem obtaining a loan whenever you need one, provided that you have not utilized most of your available credit or recently applied for a bunch of loans. You will also be eligible for larger credit lines and loans in greater amounts than those with lesser credit. You can also afford to be choosey with who you do business with as lenders will compete with one another to earn your business. Managing good credit is no secret nor is it a mystery. If you do fall into this credit score range make sure that you:
* Never miss a payment
* Utilize no more than 15% of your credit on average
* Keep balances low on credit cards
* Apply for new credit only when absolutely necessary.