A good credit score range simply means the section of a credit rating scale that is viewed to be favourable to a person that has a credit score within that area. For example, an Experian score of 650 to 800 when using the US rating scale is considered good to excellent in the credit score range. This scale ranges from 300 to 850, where 300 is the poorest credit rating.
A person’s credit score and the range that it is part of are calculated by credit bureaus by unique mathematical formulas and further data algorithms which are not made public.
Not everything is as linear as it may seem when it comes to exactly what a good credit score is. This is simply because there are many credit rating systems on the market all of which provide different scales. Further confusion arises when credit scores are looked at around the world with some agencies using alphabetical scores instead of numerical, other agencies use a combination of the two. Furthermore, individual credit lenders may use their own set of criteria to determine an individual’s risk assessment. It is because of this that a good credit score and a good credit score range is dependant on the scoring system of a particular credit bureau or lender.
Lenders that use alphabetical ranges often have a scale from ‘A to H’ (though this of course varies between lender). ‘A’ is the lowest risk category and highest credit score and ‘H’ represents a high risk client with low credit ratings.
Once a person’s credit report has been received and the credit score is determined, it is in that person’s interest to try and increase their score by various tasks in order to move it into a more favourable area of the credit score range. This in turn will allow for more successful credit applications as well as lower rates of interest on that credit.
To show the effect of financial benefit on a sliding scale of people with differing credit scores is the table below. This is using the FICO credit score with an example of a 30 year mortgage interest rate for a $300,000 mortgage.
Fico Score APR Monthly Payment
760-850 4.994% $1,609
700-759 5.216% $1,650
680-699 5.393% $1,683
660-679 5.607% $1,724
640-659 6.037% $1,806
620-639 6.583% $1,913
Generally speaking and by taking all information from credit bureaus and agencies from many countries into account; individuals placed in the top 20% of a credit score range have overall ‘excellent’ credit ratings and history, if placed in the top 40% to 20% then that is considered to be a ‘good’ credit score range.
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