Although what constitutes a good or bad credit score is really up to the credit provider, there are some general guidelines borrowers can use
Good and bad credit scores
Here at Auto Credit Express, borrowers who know their credit scores sometimes ask us if those scores are "good" or "bad". And while it isn't a question we can readily answer, there are some general guidelines that normally determine which range their scores fall into.
That important 3-digit number
To begin with, although all of them consist of a 3-digit number, there is more than one kind of credit score. The score that is most well-known is the FICO score, introduced in 1989 by Fair, Isaac, and Company (hence the name FICO – which the company now calls itself). The FICO score ranges from 300 (the worst) to 850 (the best).
A second credit scoring model was created by the three major credit bureaus (Equifax, Experian and TransUnion) in 2006. The original VantageScore had a different scale that ranged between 501 (the worst) and 990 (the best), while a newer version, released in 2013, has a scale that matches that of the FICO score with a range of 300 to 850.
Although in both of these models you can tell the "best" credit score (850) from the "worst" one (300), the reason it's difficult to judge what constitutes a "bad" or "good" credit score in that fuzzy area in-between is that it's up to each individual credit provider to decide the level of risk they're willing to take.
In other words, one credit provider may decide that it's willing to loan to borrowers with a credit score of 550 and above, while another credit provider may only consider individuals with a credit score of 700 or more.
In addition to setting approval limits, once providers make that decision they typically assign the interest rates they'll charge based on credit score levels within that approval range.
Unless the loan contract is for a fixed term and at a fixed rate, credit providers also monitor customer credit scores when deciding whether to raise or lower credit limits or even close accounts. Since each provider makes these decisions independently, a credit score is only "bad" if the credit provider – at any point in time - decides it is.
Confused yet? Don't be.
Credit score ranges
Although credit providers decide who they will and will not approve, there are, in the real world, some generalizations that can be made. For credit scores that have a range of 300 to 850, the following ranges are generally accepted:
Excellent Credit: 781 – 850
Good Credit: 661-780
Fair Credit: 601-660
Poor Credit: 501-600
Bad Credit: below 500
The Bottom Line
Since each credit provider decides the acceptable level of risk they're willing to take, it's really hard to say what a "bad" or "good" credit score is. Despite this fact, there are generally accepted score levels within an overall credit scoring range that can be called "excellent," "good," "fair," "poor" and "bad".
Speaking of credit, we want you to know that, whatever your situation, Auto Credit Express helps borrowers in a very wide credit range find car dealers that can offer them their best opportunities for auto loan approvals.
So, if you find yourself in this situation and need a car loan, you can begin now by filling out our secure online auto loan application.