What does a 700 credit rating mean?

Credit ratings are based on an analytical scoring methodology developed by a company called Fair Isaac Corp. (FICO) that objectively measures, mathematically, the likelihood of loan repayment for individual consumers. The higher a person’s FICO score the greater the likelihood of loan repayment. Approximately 75% of all credit decisions are made based on the applicant’s FICO score.

A run-down of a FICO model is as follows:

FICO Score:                                                                  Good loans to bad loans:

<620                                                                                                8 to 1

620 – 659                                                                                      26 to 1

660 – 679                                                                                      38 to 1

680 – 699                                                                                      55 to 1

700 – 719                                                                                    123 to 1

720 – 759                                                                                    323 to 1

760 – 799                                                                                    597 to 1

800>                                                                                          1292 to 1

The average score is approximately 700. Approximately twenty percent of the population scores below 620. Less than two percent of the population scores above 800.  Of course FICO models are affected by market economies and are subject to change.

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2 Responses to What does a 700 credit rating mean?

  1. The article writing style is ideal and left me wanting for much more.

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