When it comes to credit scores, higher is better.
The most commonly used consumer credit scores range from 300 to 850.
There is no one score that is universally accepted by lenders as being excellent or poor, but a score of about 750 and above is considered “excellent” with the best interest rates being offered. A score of about 580 or below is viewed as “poor” or “subprime” and a higher interest rate and down payment may apply or the loan may be denied altogether.
Once you know your credit score estimate, you will have a better understanding of what interest rate is available to you as well as the maximum amount of the purchase for which you can qualify.
Your credit score not only affects your ability to borrow money at an attractive rate, but it can also impact insurance rates and employment decisions. A poor score can result in a higher insurance premium being charged while a good score can qualify you for a discount. In some cases, an employer may look at your credit score to help determine responsibility.
Of course, the big pay off comes with a lower interest rate and resulting lower payment. And the higher the loan amount, the greater the savings will be.
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Credit Score of the US Population
Sixty percent of the US population has a credit score of 700 or over. Scores below 620 may be considered sub-prime and less favorable terms are typically offered.
Click here to find out how your credit score compares to the rest of the US population.