Credit Score

So where do you rank…credit score-wise?

Comments 9 Comments

One of the reasons that lenders and insurance companies use credit scores is because they make it very easy to rank their customers and applicants.  Think how easy it is.  Let’s say that 100 of you walk into my bank and fill out auto loan applications.  I’ll pull credit reports and scores on every single one of you and then stack your applications from the highest score all the way down to the lowest score. 

What I’ve just done is to rank order all of the applications against each other.  I can approve everyone with a 600 or higher credit score and deny everyone with a 599 or below.  It’s very simple.  Or, I can approve the top scoring 50% regardless of the score.  I’ll just grab the top half of the applications and throw out the bottom half.  Viola!!

So have you ever wondered where YOU stack up?  We’re American’s right?  We have big egos and we want to know how we rank compared to everyone else.  Fair enough.  Here’s some information that you might find interesting…and maybe frustrating.  Don’t know what your credit score is right now? Not to worry, you can get your free credit score right now with no credit card required!

700 Credit Score – Pretty good score, right?  Where do you think a 700 ranks your nationally?  You might be surprised to know that a 700 puts you right smack dab in the middle.  That’s right, a 700 will get you to the 50th credit score percentile.  That means that half of the country scores higher than you and half scores lower than you.  Shocking isn’t it?

I think this surprises people because we’re not use to being graded by FICO’s 300-850 scale.  We’re all so use to the A-F system of grading.  The difference is that a 700, while it’s only an average credit score is a pretty good score if you’re applying for a loan.  So what’s the conclusion?  Simple…most people in this country have good credit and good credit scores. 

620 Credit Score – Pretty bad score, huh?  A 620 will put you in the 25th credit score percentile.  That means that 75% of the folks in the country have a higher credit score rating than you.  Not good.  But wait. Don’t despair.  You can easily get a mortgage or a car loan with a 620 credit score.  In fact it’ll be easier for you to get a $200,000 mortgage than it will be for you to get a $2,000 unsecured credit card.  Seriously.  Here’s why…

The bank can easily take things like cars and houses back if you don’t make your payments.  They are called "collateral" or "security."  As such, lenders can go deeper into the credit scoring pool when they lend money on these items.  But, it’s kind of hard to repossess dinner or a great vacation charged on a credit card.  That’s why it’s easier to get a house with bad credit than it is to get an unsecured credit card. 

755 Credit Score- Hey, now we’re talking!! I must have the crème de la crème of credit scores.  Cool your jets.  You’re not that great.  A 755 will get you into the 75th percentile.  A full 25% of your neighbors have higher scores than you.  In fact, if you earned 75% of the points in your school classes then I believe you’d be getting straight C’s. 

The good news is that pretty much any lender is going to think you are golden with a score of 755.  You’ll get whatever you want at the best interest rates available.  Enjoy your excellent score but don’t have an attitude about it!

Anything less than 500 or above 800 – Only about 1.5% of the people in this country have credit scores less than 500.  It’s pretty hard to get a score that low.  You really have to try and NOT pay your bills on time and that still may not be enough.

And only about 6% of us have scores greater than 800.  That’s because most American’s have a ton of credit card debt and you’re not going to get into the "800 Club" with a lot of credit card debt no matter how well you pay your bills. 

This means that about 92.5% of us will have a credit score ranking between 500 and 800. 

Where does your credit score rank?  Now you know. Share your feedback or questions in the comments section below and, if you haven’t done so already, go get your free Credit Report Card now!

Please note that our comments are moderated, so it may take a little time before you see them on the page. Thanks for your patience.

  • Rob Trokey

    Wonderful blog. Curious if you would be able to provide a source for the information on credit scores and percentiles. I’m researching credit scores and utility deposits. Thank you!
    http://www.typepad.com/t/trackback/4448034

  • isela

    my credit score is 614 is that bad or good

  • Bab

    Is credit score of 800 and 755 going to earn the same interest rate if buying a house?

  • Cindy Smith

    Excellent information! Thanks so much!!!

  • James

    Is Score Rank used by Experian, Equifax and Transunion the same as Percentile
    in the PLUS SCORE MODEL ?

    What is the highest score rank or Percentile ever recorded or obtained by Experian,
    Equifax or Transunion using the PLUS SCORE MODEL (330 – 830 ?) ?
    Is (330-830) the range for the PLUS SCORE MODEL ?

    James.

  • Carlos Segura

    A person does not have any control if an employer checks your credit. Why does your credit rating drop when a potential employer requests a credit report. Is this something that can be reversed?

    • Credit.com

      Carlos – Employer credit checks are considered “soft inquiries” and even though they are reported in your credit report, they have no impact on your credit score. The only inquiries that have an impact are those where you’re actively searching for credit or some other type of service. Self credit checks and employment screening inquiries do not affect your score.

  • Greg Martin

    Credit score is a faulty way of determining your financial well being. It’s the money in the bank plus your income that determine how well you’re doing. Credit score only shows how good a boy or girl you are when paying banks you might still be broke and/or poor.

    • http://www.credit.com/ Credit.com Credit Experts

      Credit scores are designed to suggest how likely you are to repay money that you borrow; they are not a measure of financial well-being.

      And yes, you can be broke and/or poor with a high credit score, or you can be wealthy and have a low one.

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