Many people across the country are concerned about their credit scores. They want to ensure that they have the appropriate scores to take out a car loan for any credit and qualify for mortgages. Therefore, a common question is, “What is a fair credit score?”

The Numbers

Well, different crediting agencies have different systems of numbers that they use. As a result, it’s going to depend a little bit on which set of numbers you are looking at. In general, however, the answer to your question of “What is a fair credit score?” is going to fall in the 500 to the low 600 range. Under 500 is generally dropping into the poor level, and when you start to get into the mid 600s, good credit scores start to arise.

What Your Scores Mean

If you are going for an auto loan, for example, you probably want to know how your scores could affect you. Part of that answer is going to depend upon where you fall in terms of fair credit. People who are wavering around 500 are going to certainly be a bigger risk for lenders because you have almost poor credit, but individuals bordering on good might be able to get “bumped up” into a better bracket.

Interest Rates on Loans

In the event that you are planning to take out a loan for a car, home or other purpose, your interest rates are going to depend heavily upon your credit scores. Individuals with higher scores get lower interest rates than people with lower scores, and your goal is to have as low of an interest rate as possible. Maybe you are on the cusp of fair and good. Consider waiting a little while longer so that you are able to get interest rates for good or even excellent credit by rebuilding.

A fair credit score is going to vary a little bit depending upon the reporting agency, but in the 500s and low 600s is generally a good estimate. When you are examining your credit scores, remember to:

• Consider the definition of fair for your specific situation.
• Understand what your scores mean.
• Realize how your credit scores could affect your interest rate.

Having fair credit scores is certainly not a terrible place to be, so you should not think that. However, nothing is wrong with working to get them into an even higher level.