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Understanding Your Credit Score

In order for lenders to assess the level of risk involved with borrowers, they typically use borrowers’ credit scores. Some employers, landlords, and insurance companies use credit scores as well when making decisions about job applicants, prospective tenants, or policyholders. When it comes to applying for a mortgage, car loan, credit card, or any other loan, a high credit score could save you money and a low score could cost you money. The first step to improving or maintaining a healthy credit score is understanding your score.

What a Credit Score Means

Credit scores range from 300 to 850. The higher your score, the better your credit is. Generally, credit scores fall within the following ranges:

  • Above 750: excellent

  • 700-750: good

  • 650-700: fair

  • 600-650: bad

  • Below 600: very bad