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When is your credit score good enough?

A credit score of 500 will get you a car loan, but a score of 720 will get you a much better rate.

By Karen Datko Sep 3, 2010 9:33AM

This post comes from partner blog The Dough Roller.


So, you've taken advantage of a free credit score offer. With your score in hand, you may have even done some research on what is a good credit score. But the question still remains: What exactly does your credit score mean? How does your score compare with those of others? And do you have the score you need to qualify for the credit you want?

Money Magazine published an article this month that answered those questions. The article was actually about a few people that have nearly perfect credit (FICO score of 850). While a perfect credit score may give you bragging rights, who cares? As Money points out, a FICO score of 780-plus will get you the best deal on any loan.


But understanding where your score falls on the total range of credit scores and whether it's good enough to qualify for a loan can be helpful information.  Post continues after video.

Let's first look at the range of credit scores. The table below shows the percentage of people who fall within the various ranges of FICO scores.


Credit score range

% of people in each range

800 - 850


750 - 800


700 - 750


650 - 700


600 - 650


550 - 600


500 - 550


Below 500



It's interesting to note that more than half of the people with credit scores fall in the range of 700 and above. While this table tells you how your score compares with the total range of scores, it doesn't tell you what score you need to qualify for various types of credit. Let's look at that now.


Auto loan. Score needed: 500. While a score of 500 won't get you the best deal on an auto loan, you can qualify. According to Money, a 500 FICO score would get you a car loan at 19.1%. Not exactly cheap money, but you would have a car to get back and forth to work.


Best auto loan rate. Score needed: 720. To get the best auto loan, you need a score of 720 or higher. At today's rates, that should net you a loan at about 5.3%. Compared with the 19.1% a score of 500 will get you, it's easy to see the value of a good credit score.


Mortgage approval. Score needed: 620. While the rules governing mortgage loans are a lot more complicated than consideration of a single FICO score, 620 is generally the minimum score you must have to qualify for a home loan. A FICO score of 620 won't get you the best mortgage rates. But at today's interest rates, you should be able to get a loan at about 5.9%.

Best mortgage rate. Score needed: 760. When it comes to good credit scores, your home loan is where the real money is. With a score of 760 or higher, you can get a mortgage at today's rates of about 4.3%. Compared with the 5.9% a score of 620 will get you, the savings over the life of the loan can easily go into the tens of thousands of dollars. So if you are looking to buy or refinance a home, your credit score should be a top priority.


Credit card approval. Score needed: 660. It seems odd that you can get a home loan with a score of 620, but need 660 to get a credit card. One reason is that home loans are governed in large part by Fannie Mae and Freddie Mac, and these government-backed entities make it easier to get a mortgage than it would be without government backing. But, for credit cards, 660 is the score you need. You can qualify for what are described as "bad credit credit cards" with a lower score or even no credit history at all, but many of these are either secured cards or prepaid credit cards.

Best credit card rate. Score needed: 740. While you can get credit cards with a lower score, to qualify for the best deals, you should aim for a score of 740. This would include the best deals on balance-transfer offers, the best cash-back cards, and travel reward credit cards. And of course you'll need a FICO score of 740 or better to qualify for a low-interest credit card, too.


More from The Dough Roller and MSN Money:



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