Most of the time, credit score ranges are measured on FICO’s scale of 300-850. 300 is the lowest of the low, while 850 is a “perfect score”. You shouldn’t worry too much about getting to 850 though, as a mere 1% of the US population has a score of 850, and most of them were sensible borrowers for decades and decades before earning that perfect score.
The higher your credit score is, the better your chances are of being granted a loan, mortgage, credit card, or another form of credit. A high credit score shows that you’re a less-risky borrower when compared to someone with a dismal score. The ideal range is somewhere around 750-850 depending on who you ask, and the ranges are generally categorized as follows:
740-850 = excellent
700-740 = good
640-700 = average
500-640 = bad
300-500 = very bad
A score in the “excellent” range makes you an ideal applicant in a lender’s eyes. If you fall within this range, it is likely that you are a well-established credit user who consistently borrows and pays their bills on time. An excellent credit scorer will probably have a range of credit types (i.e. mortgage, credit card, student loans) that showcase their versatility and consistency.
A score in the “good” range still makes you a preferable applicant for credit. You are likely to be sensible credit user, though may have 1 or 2 late payments or mishaps against your name that may have dragged you down slightly. You may even just simply be relatively young, and your credit history isn’t long enough to be deemed trustworthy and reliable data, even if it is very good.
A score in the “average” range makes you just that, average. You are still likely to be accepted for various types of credit, though may struggle with certain things such as high-interest rewards-based credit cards, which cannot afford risky applicants in the way that lower-interest credit cards can.
A score in the “bad” range requires you to make immediate improvements to your credit score. If your score is in this range, you are likely to be rejected for numerous types of credit, because you are considered a risky borrower who cannot consistently pay their bills on time or in full. You may wish to opt for secured credit cards if you score is this bad, as they allow you to cautiously “build up” your credit score over time, and don’t have very stringent requirements when compared to regular unsecured credit cards.
A score in the “very bad” range requires serious and immediate attention. If you can apply for a secured credit card, then you should do so immediately. Pay the secured card’s bills off on time, and begin slowly building up your credit score once more. Avoid late payments at all costs, as these are the single easiest way to drag your credit score down even further.
You can read our blog on “how to improve your credit score” for more detailed information on improving your credit score.