What's Your Score?

Credit score that is. The fact is, the higher your credit score the lower the interest rates you qualify for.

Scores range from 350-850 using the traditional FICO method. FICO being the Fair Isaac Corporation which is the score most often used by lenders.

Scores of:
750-850 Excellent
660-749 Good
659-620 Fair
350-619 Poor

The median FICO score in this country is 723 which is good. How can a few points affect what rates you qualify for. An example of mortgage rates from myFICO are:

For a $216,000 30-year, fixed rate mortgage:
If your FICO® score is: Your interest rate is: ..And your monthly payment is:

760 - 850 5.92% $1,284
700 - 759 6.14% $1,314
680 - 699 6.32% $1,339
660 - 679 6.53% $1,370
640 - 659 6.96% $1,431
620 - 639 7.51% $1,511

The rates are valid as of 2/24/2006 and are updated daily. The are also national averages, you local rates may vary.

The difference between the median score or 723 and a fair score of 620 is $197 per month. I'm sure we can all use an extra $197 in our pocket every month.

Be sure to come back for my follow up posts on how your credit score is determined, what your score is and is not, and how to increase you credit score.