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What is a Good Credit Score ... and How Do I Get One?

by Brandon Cornett

Credit scores go hand in hand with buying a home. Your credit score is one of the first things a mortgage lender will review when deciding whether or not to qualify you for a home loan.

When your credit score is good you will have a much easier time qualifying for a mortgage loan. But when your score is bad, the opposite is true -- you will have a harder time qualifying for a loan, and you will likely pay a higher interest rate when you do get qualified.

But what is a good credit score and, more importantly, how can you achieve one? These are the questions we will answer in this article.

Credit scores -- also referred to as FICO scores -- range from 300 to 850, and a higher score is definitely better. The higher your credit score, the easier time you will have getting qualified for a mortgage loan. You will also generally pay a lower interest rate on your mortgage when your credit score is high. So what is a good credit score in the United States, and how can you put yourself into that range (or even higher)? Let's find out!

A Good Credit Score by Industry Standards

If you ask a handful of credit experts what makes a good credit score you will probably get a handful of different answers / ranges. So I've taken ten articles on this subject from ten reputable websites and averaged them out. Based on that "scientific" analysis, here's what most experts agree to be a good credit score...

• 750 or above -- If your credit score falls into the range, consider yourself lucky (or just financially responsible). This is considered to be an excellent score by most mortgage lenders and will likely result in an easier qualification process. You will probably get the best interest rates and mortgage terms with a score in this range.


• 700 to 750 -- Credit scores in this range are considered somewhere between very good and excellent. With some mortgage lenders, there seems to be an "imaginary line" at the 700 mark with regard to what is considered excellent credit, and what is a good credit score ... so 700 and up is a great "neighborhood" to be in.


• * According to most reliable sources, the average credit score in the U.S. falls into this range, the average being 723. So by that yardstick, any score below around 700 is by definition below the national average, and any score over that is above the national average.


• 650 to 700 -- Generally speaking, a credit score in this range is considered good or even very good, depending on the mortgage lender.


• 600 to 650 -- Okay, now we're getting close to what might be considered a good credit score by most lenders. It's not very good or excellent, but then again it's not sub-standard or bad either. To many lenders, a credit score in this range represents a reasonably qualified mortgage borrower. You won't get the best rates with a score in this range, but it's still considered a good credit score so approval should be feasible.


• Below 600 -- If your credit score is below the 600 range, a higher percentage of mortgage lenders will consider you to be a credit risk. You could still find a willing lender at this point, but you are going to pay much higher interest rates than you would with a good or excellent credit score. And that means a larger mortgage payment each month!

The title of this article is What is a Good Credit Score -- so I don't want to go any farther down the scale than this. We have covered enough of the range for you to understand what makes for an excellent score, a very good score, and a good score. That's my goal with this article.

Actually, telling you what makes a good credit score is only half of my goal. The other half is to share tips on how to achieve such a score. And to that end, I direct your attention to the helpful articles below on improving your credit score:

How to Improve Your Credit Score

I hope this article helps you understand what a good credit score is and how it affects you as a home buyer.

Brandon Cornett is the publisher of Home Buying Institute.