What is a good credit score?

When lenders talk about "your score," they usually mean the FICO® Score developed by Fair Isaac Corporation. It is thoday's most commonly used socreing system. FICO scores range from 300-850, and most people score in the 600s and 700s (higher FICO scores are better). Lenders buy your FICO Score from three national credit reporting agencies (also called credit bureaus): Equifax, Experian and TransUnion.

In the eyes of most lenders, FICO credit scores above 700 are very good and a sign of good finacial health. FICO Scores below 600 indicate high risk to lenders and could lead lenders to charge you much higher rates or turn down your credit application.

Now, as you know this is all just general information on how the lending world works. As followers of Dave Ramsey thru Financial Peace University, we do not borrow money. Except for a mortgage and put 20% down and finance no more than 1/4th our monthly income in a payment on a 15 year fixed rate loan. And yes you can get a mortgage without a FICO score.

Dave Ramsey has enough money to write a check to purchase an entire apartment complex but based on most apartment complex rental rules he couldn't rent an apartment because his FICO score is ZERO. We will cover this in more detail in future posts.