What is a good FICO score?

November 04, 2007

Posted by chris-lott

( 2 ratings )

The national median FICO score is 725 (out of 850). If you have a score of 680 or lower, you will have difficulty getting good terms on loans or financing. This information is according to The Ultimate Credit Handbook.

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December 02, 2007

Posted by WealthMentor

( 0 ratings )

Each credit reporting agency (Equifax, Transunion and Experien) all run slightly different scoring models. While they do not release how they arrive at their actual scores, most of their scoring methodology has been figured out by watching the patterns. For example, if you apply to multiple credit cards and for different credit types (car, home, retail card) over a short period of time, this will lower your score. We know this by simply seeing what our score was before we applied and had our credit pulled and what our score is after we apply and have it pulled. We see what our score is before we pay a bill 30 days late and what it is after we have paid our bill 30 days late. Some ex-executives and software writers have come out with some very good "inside" information about what drives a score, but the basics remain the same:
Pay on time.
Maintain a 30% balance-to-limit ratio to keep scores high.
Don't apply to multiple places in a short period of time.
Keep your accounts open and active so as to give history to your profile.

What is a good score?
In the mortgage business, you can pretty much get the best rates possible with a 680 or better.
But a 620 or higher will still get you a 100% loan with reasonable rates (reasonable in this context means "as it relates to what the rest of the market is getting").

Anything less than that and you will get eaten alive by lenders. I assume the same thing can be said for credit cards, cars and retail credit.

Hope that helps!
Danny Arrington

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