Many of you may be wondering what's a good credit score to have in today's economy? Well, the answer may surprise you. At this time last year the credit crunch was nowhere near what it is today. You could still get favorable rates and decent terms on loans and lines of consumer credit with a average score. However, after the recent sharp economic downturn cut through the sub-prime markets, minimum credit requirements have tightened significantly. Where normally, a 650 beacon score could get you the "average" rates, today this may unfortunately not be enough.
This issue magnifies if you are looking to make a large purchase such a home or automobile. The financing requirements for these items have been squeezed so much that your average buyer can not even get past the initial approval process, which is the credit score screening.
This does not just affect those with credit scores below 700 either. Even if you have a great score, the additional requirements have shifted to require much more equity and virtually no consumer credit debt. If you do have a higher debt to income ratio, you may be approved, but get hit hard with high interest rates.
The answer to what's a good credit score today means much more than just having a good score. It means having savings stashed away, solid control over your consumer credit situation and proof of income for up to a year prior to the date of application. getting approved under the most favorable terms has become extremely difficult, even for those of us that have a beacon score above 700.
First and foremost however, you must keep a watchful eye on your credit report and score. This is because its the first line of weeding out those unqualified for loans. If you cannot make it pas this initial wave of checks, you can forget about getting approved.
Your best bet is to start off by obtaining a copy of your credit report AND your score so you can check to see just how things look on your end. Double check to make sure you don't have any negative marks on your report that are there by mistake. If so, have them removed immediately. Also, obtain your credit score and begin taking necessary steps to improve it. Because what's a good credit score today, may not be a year from now.