Credit Scores: Good Vs Great

Do you know what separates a good credit score from a great one? It’s becoming increasingly more important as your credit score is being used in more places, by potential employers, landlords, and even cell phone providers. Check your oil? Check your credit score, tick tock, like clockwork.

The tricky part is being able to tell whether you have a good score or a great score (or a bad score!). Do you know what the difference is? You might be surprised that it doesn’t come down to a number, it’s about what you want to do with it. How good your credit score depends on what type of loan you want. Let’s take a look at some sample interest rates for 30-year fixed mortgages from MyFICO, owned by the Fair Isaac Corporation.

FICO Score	APR	Monthly payment
760-850	4.873%	$1,587
700-759	5.095%	$1,628
680-699	5.272%	$1,661
660-679	5.486%	$1,701
640-659	5.916%	$1,782
620-639	6.462%	$1,889

So a great score is anything above 760, a good score is between 700 and 759. However, the real gem from this table isn’t the difference between good and great, it’s where you stand. If you have a score of 750, it behooves you to try to get it over the 760 hurdle. It could mean a savings of $50 a month on your mortgage payment for the next 360 mortgage payments!

So, the next time you’re worried about your score, or checking it compulsively with a free fico credit score service, think about the reasoning behind it. If it’s above 760, then for mortgage purposes it’s as good as it can get.

Jim writes about personal finance at Bargaineering.com.