A good credit rating is the most valuable thing we have when it comes to financial independence. Sadly, the information in our credit reports is often inaccurate. Surveys have revealed that nearly 80% of all consumer credit reports contain serious errors or mistakes of some kind. This prevents millions of Americans from being able to purchase homes, automobiles, and other consumer goods and services. Additionally, many people are paying high interest rates unnecessarily. This results in an endless cycle of high monthly payments, which many consumers cannot afford. Unable to pay their bills on time, they continue adding negative information to their credit report, causing their finances to go in a downward spiral, which can have a devastating effect on their lives.

How Credit Scores are Used

In addition to evaluating your risk level for borrowing money, credit scores are increasingly being used to determine employment eligibility, insurance rates, and in some cases, the rates charged for utilities. Your credit score is one of the most important numbers in your life. Most scores will range from 300 to 850, with the average American credit score being 677. Keep in mind, the higher your score, the better the terms of the credit you will qualify for.

Below is a breakdown of score ranges and what kind of terms borrowers can expect at various levels:

Credit Score Rating Chart

Credit Score Description
760 – 849 Excellent score. The lender will offer you their best interest rate.
700 – 759 Great score. There won’t be any trouble in getting a loan at good interest rate.
660 – 699 Good score. There won’t be any problem in getting a loan at good interest rate.
620 – 659 Fair score. You may qualify for the loan but not at good interest rates.
580 – 619 Poor score. You may qualify but the interest rates will be very high.
350 – 579 Very poor score. It’s doubtful that you may qualify for the loan, and if you qualify, the interest rates will be extremely high.