In Search Of Credit Score Nirvana

January 27, 2012

in News

In Search Of Credit Score Nirvana

In the three years since the credit crisis ushered in an era of household budget austerity, a gold-plated credit score has become a source of comfort, even a status symbol for many people. Consumers with elevated scores typically get the lowest rates on mortgages and car loans, along with elite credit card offers. “Given the importance of credit scores in borrowing, job searches, and even insurance premiums, it’s no surprise that some consumers look at their credit scores as a way to keep score against the Joneses,” said Greg McBride, senior financial analyst at Bankrate.com. The model most commonly used to gauge a consumer’s financial health was established by FICO, which ranks a borrower’s default risk on a scale ranging from 300 to 850 based on debt levels, payment timeliness, the length of credit history, and other factors. The score that’s considered the cutoff to qualify for the best rates, however, has changed. Before the recession, it was generally 720; now it’s at least 750, says Ben Woolsey, director of marketing and consumer research at CreditCards.com. [Read this article]

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