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Experts Announce “Good” Credit Score

By Sally Maison
Published: Tuesday, December 1st, 2009

As the country enters holiday season, consumers have become more eager to avail credit cards. Unfortunately, most card issuers require applicants to either have a good or excellent credit score. Creditors use different scoring models and have varying standards, leaving many consumers confused. But experts say while good or excellent credit ratings fluctuate with the economy, there are still figures that would impress any lender.

Experts Announce “Good” Credit ScoreSteve Katz, a finance expert working for one of the major bureaus, says the scoring systems and ranges do not really change but banks continually change their lending standards as the economy rises and falls. As today’s economy remains tough for everyone, getting the best terms on any plastic would require consumers to have a high credit score. But experts assure card applicants that there is not much need to worry a lot since lenders would not require them to have a credit rating of 800 or higher.

Steve Ely of Equifax notes that a score of 720 is already considered “good” three years ago. However, today’s 720 is already equivalent to 760. Ely adds that that 760 mark of the FICO credit score is the lower end of an excellent rating. Scores running from 725 to 759 are considered “very good.” Consumers whose rating are 720 or below may have a difficult time finding a creditor who will offer them a premium card since most of them are aiming to reduce risks by dealing only with clients who have very high ratings.  Ely tells consumers that if their score is 620 or below, they will have a very difficult time getting a credit card for holiday shopping or for any other reason.

Consumers who are struggling with their credit score but still want to avail a plastic can opt for a secured card. Unlike regular accounts, cardholders of secured plastic are required to deposit money. The amount available under their name will serve as their credit limit so they will not be able to borrow more than they have deposited.

Consumers planning to shop for Christmas are advised to check their credit score now so they can know how much improvement they need. Banks use different scoring model but most of them use FICO score, the rating model developed by Fair Isaac and Company which consumers can get for about $15 from TransUnion, Equifax, or Experian. Card applicants can also get their rating from Fair Isaac itself for about the same costs.

Some credit bureaus offer additional services including giving out credit reports but they include additional charges.

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