How do you know if you have good credit?
By: Darrell Castle
Hello, I’m Darrell Castle and I’m an attorney licensed to practice law in the state of Tennessee and I’ve been doing a series of videos on the subject of credit. And by way of review, I will tell you that credit is what makes the world go round; it’s what makes life possible as we know it. Our homes, our cars and even our education is financed through credit. Many of us finances groceries, gas and so forth through credit.
Credit is very very important and it’s very important that you pay attention to your credit score and that’s what we’re talking about today – what is good credit? Well, I like to use the credit agency, FICO. It’s the best one in my opinion and it’s what the banks use and it’s a 3 digit number ranging from 300-850.
720 is the median. That means half the people have less than 720 and half the people have more than 720.
720 is the score from back before the crash and housing failure; that would get you the most favorable rates for most banks. Now that score is probably moved up to about 740.
– 750 is a number that 40% of the people have
– 13% have 800 or above
So you get into kind of rarified air as you get up there; 720-740 will get you the best rates from most banks.
Now, Fannie May, the giant lender and mortgage company, just moved their rating from the bottom on whether they would even consider you from 580 to 620; now it’s a 620 minimum before they’ll consider you for a loan.
My point is that credit is very very important and your credit score is very very important and so is your credit worthiness – or your credit score to the banks so that lenders consider you worthy to lend money to and less-risky so that is very very important.
Now, before you can worry about getting your credit score higher, you need to look at your finances. If you’ve got a pile of debt out there that you can’t pay and you’re not paying these bills, no one is going to consider your for loans anyway, so you need to do something about that. If you just can’t catch them up, consider bankruptcy – that is an alternative. You can start over from the beginning.
There are ways to get your credit score back up after a bankruptcy like the credit program we offer, “7 Steps to 720;” a very good program. But, do something to take care of your bills and then start trying to get your credit score higher.
If you’re struggling with debt and are considering bankruptcy, or if you’re interested in filing for bankruptcy, you can speak to one of our experienced bankruptcy attorneys, free of charge, by calling (901) 327-2100 or filling out one of our contact forms on this page.