What is a Good FICO Credit Score in 2010?

Your FICO score is one of the factors that lenders use to determine whether or not they will approve you for a credit card, auto loan or mortgage. Your credit score is also a factor in the amount of interest you will have to pay if you are offered a loan or credit. The higher your credit score is, the easier it is for you to qualify for credit cards and loans and the better terms you will get. FICO scores range from 300 to 850. What is a good FICO Score?

To answer the question, it is necessary to look at the changes in the lending industry in recent years and how these changes have affected the availability of credit.

A couple of years ago, if you had a FICO score of 650 or above, you were considered to be eligible for a prime mortgage loan. A prime mortgage loan is defined as one with a fixed interest rate that is no higher than the current market rate. Sadly, this is no longer the case.

The lending landscape has shifted significantly over the past two years. In the wake of the financial collapse that occurred in the fall of 2008, most banks have tightened their lending standards. Lending standards include FICO scores and banks no longer consider anyone whose score is below 750 to be a prime risk. Today, a score of 650 would mark you as a subprime borrower, if you are able to qualify for a loan at all.

Another factor is Fannie Mae's revised guidelines for purchasing mortgages. In the fall of 2009, Fannie Mae increased the minimum credit score to 620 from 580 on mortgages it will purchase. Since most banks want to be able to sell the loans they make, you probably won't qualify for a mortgage of any sort with a credit score under 620.

Accordingly, it would be safe to say that a good FICO score today is probably 750 and above. If you have a score below 750 it doesn't mean that you won't qualify for credit at all, it simply means that you will likely pay higher interest rates and have less favorable terms for that credit.

Source by Kathy McGraw

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