A majority of lenders in various industries will evaluate your creditworthiness with FICO Score. What is good FICO score to ensure your payment, loan, and credit card for getting approval with great interests and down payment? Let’s take a look at the full explanation below.
Definition of Credit Score
The term credit score sounds very familiar when you intend to apply for a credit card or pay with a loan system. For lender, your credit score will determine many things like your credit card approval, or interest rates and down payment of your home mortgage loan or other loan payments.
If you look for definition, credit score represents how worthy you are as a creditor. A higher score means better credit offers. There are different concepts of credit score, but the most common are Vantage Score and Fico Score. What is good Fico Score for your credit applicant? Let’s take a look at these explanations.
What is FICO score?
First of all, you should know what is FICO score. Created by Fair Isaac Corporation, FICO Score range from 300 to 850 points and still become one of the most used credit scores in the U.S. for varying lenders, from car dealership to home mortgage loan companies.
What is Good FICO Score
In this model, there are five categories of FICO score. What is good enough if you want to apply for a credit card or loan payment? Generally, it will be enough if you score more than 670 points which is categorized as good score, but it will be better if your credit score is between 740 and 799 (very good) or between 800 and 850 (Exceptional).
The red flag is if you have a score under 579 while credit score between 580 and 669 is still considered fair enough. If you wonder what is a good FICO score for a mortgage. Well, based on the above explanation, a minimum of 670 points will be enough.
FICO Score vs VantageScore
Like what we have said before, Vantage score is also considered popular in the U.S. So, what is the difference between FICO score and Vantage score?
If we look from the initiator, FICO score came from Fair Isaac Corporation. Meanwhile, Vantage score was developed by 3 companies, that is Experian, Equifax, and TransUnion.
In addition, the credit score ranges are also different. Both of them have a minimum score of 300 and a maximum score of 850. However, differ from FICO score, the lowest category of Vantage Score is between 781 and 850 and is categorized as excellent while the lowest category starts from 300 to 499.
The Vintage score also doesn’t have a “very good” category, but they add “poor” category below the “fair” category.
In conclusion, if you use FICO score. What is good enough will be above 669 points while if you use Vantage score, it will be considered as “good” if you score above 660 points.
Now, after you read the above explanation about credit score, Vintage score, and FICO score, you can estimate what is the minimum credit score that you should have, right? Improve your credit score and get the best credit offers available!