What Counts as “Bad Credit”?
There are actually different types of credit scores and ways that they are calculated, but the most popular and commonly known type is the FICO Score. FICO used to stand for the Fair Issac Company, but the term FICO became so popular that the Fair Issac Company changed its name directly to FICO.
FICO Credit Scores typically range from 300 to 850 with 300 being very poor and 850 being exceptional.
Here is the detailed breakdown of FICO Score Ranges
300-579: A score in this range is considered Very Poor. Credit applicants with a score in this range will often be required to pay larger fees and deposits, or sometimes may not be approved at all. 16% of people have a score in this range.
580-669: Scores between the 580 mark to the higher 600s are called Fair credit scores. Often, people with scores in this range will be referred to as subprime borrowers. A total of 17% of people have a credit score in this range.
670-739: This range is referred to as Good. Individuals with scores this high have a much lower rate of default. Statistically, about 8% of applicants with a Good range credit score will become seriously delinquent. Around 21% of people have a score in this range.
740-799: People with scores in mid to top 700s are in the range of Very Good. Borrowers with scores in this range will receive better than average interest rates from banks and lenders. 25% of people have a score in this range.
800-850: The top of the scale is considered Exceptional. Individuals with a score above 800 receive the best rates from lenders. Around 21% of people have scores between 800-850.
Statistically speaking, most people’s scores fall between the range of 600 to 720. What number counts as officially “bad” depends on who you ask, but it is generally safe to say that if your credit is below 580, it could stand to improve.
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About Go Capital
Go Capital specializes in providing funding for small to medium-sized trucking businesses that are looking to buy a used truck or trailer to expand the fleet. Even if your credit is not the greatest, we can work with you to get you or your employee behind the wheel and start generating cash!
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