FICO Score Range

If you didn’t know there are several different ways to score credit and one of the most popular is by Fair Isaac. The actual FICO score calculation is extremely complicated and knowing it could work to your benefit. The reason is because where you fall on the FICO score range could save you thousands in interest throughout your life.

One concept individuals need to understand about the FICO score range is scores are often pooled together. Meaning there are certain levels of scores or groupings that you will fall in. So no matter where you fall in the grouping you will get the same interest rates as others with higher scores in the same grouping. For Example let’s say that you have a 705, you would be included in the same group as all individuals that have a 700 to 759 on the FICO score range.

The implications of this pooling are twofold. One is the fact you might be in the lower end of a grouping but you will still qualify for the same types of loans as individuals several points higher. Also, to improve the interest rate you are getting you will to go to the next higher pool of scores.

Here are the most recent groupings of the FICO score range from MyFICO.

These groupings on the groupings are always subject to change. Also, these are general rankings and can vary from lender to lender. Meaning it is actually the lender that really determines what is good or excellent.

What kind of money could have a higher ranking on the FICO score range save you? If you look at charts comparing your credit score versus a mortgage payment it might seem like much. If we compare a good versus excellent credit score you will save around $26,000 on a $300,000 30 year mortgage. But when you start to think about all the credit in your life having a better credit score will affect all your lending. So you credit cards, auto loans, and personal loans will have a better interest rate and therefore it will really add up throughout your life.

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