If you would have asked a financial expert that question about your credit score a year ago, you would likely have received a different answer than the one that is true today. What used to be considered a good credit score previous to our current economic conditions was 680 or above, but these days, if you want to get the best rates and have the best options when it comes to getting a loan or mortgage, you will likely need to have a FICO score of 720 or more.



Credit scores are compiled by Fair Issac, who are the creators of the FICO credit scoring system. Credit scores are based on 5 determining factors of your credit report.

* Your payment history

* The type of credit you have

* Your credit used to credit available amount

* The length of time you have established credit

* How much new credit you have acquired

Credit scores range from 350 – 850. Credit score categories are broken down in the following manner:

700 + - This will put you in the “very good” to “excellent” credit range. Those with these scores are likely to have no problems getting approved for loans and getting the best interest rates.

680 – 699 – With a score in this range will warrant your credit score in the “good” category. You will still get good rates with this type of score for mortgages or other loans.

620 – 679 – A score in this range means you have “fair” credit. When applying for loans with a score in this range, you may not get the pick of the litter and will likely have to provide a lot more documentation to prove your credit credibility.

580-619 – A score in this range is considered “not good”. While you may still qualify for loans, you will be paying higher interest rates if you apply for anything before working to improve your credit.

500-580 – If you have a score in this range, you will likely have difficulty being approved due to your “bad” credit score. Any loans you will get will come with very high interest rates. This category is also famous for attracting predatory lenders, who will be glad to give you credit but will also charge excessive fees and interest.

499 and lower – If you are in this category, your credit is considered “very bad”. While you still may find high interest loans, it will definitely be in your best interest to work on bettering your credit score before even applying for new lines of credit.

Improving your credit score is certainly something you can do on your own. It will take some patience and follow up. Request a copy of your free annual credit report and go over every entry with a fine-toothed comb. Report any inconsistencies to the credit bureaus and keep following up to see the improvements over time. Pay your bills on time and don't max out your credit cards. Instead, start using cash and pay down your debts as fast as possible. All of these can help turn so-so credit ratings into excellent ratings.