Get Good Credit - Phone
Give Us A Call Today!
(877) 212-2450

Credit Score: What Does it Mean?

Posted by on Friday, March 18th, 2022 in Blogs
credit card - Get Good Credit

So you just got a copy of your credit report and see a score that ranges from 300 to 850, but what does that score actually mean? The credit score is an accumulation of all of your credit history put through an esoteric algorithm to produce a number that may seem meaningless. However, the score is very important and it does affect whether you will be able to secure a good loan or not.

So what’s a good score? What’s a bad score? Let’s go over what the basics mean. In short, this is what the ranges are and how creditors look at them:


Credit Score - Get Good Credit


  Looking at the scale, we can notice that the range for “bad” to “fair” credit is 380 points while the “good” to “excellent” range is 170 points. That means the biggest part of the whole range of 300 to 850 is considered bad credit. That’s crazy right? But it seems that creditors and lenders look at these scores to understand the trustworthiness of the customer, which is why they check your credit history.

According to Experian, the average credit score in the United States is 711, which is pretty good. Only 22% of United States citizens have a score of 800 or higher, which is the highest range. This 22% is made of older Americans and wealthier people. On the opposite side, 11% of Americans have a score below 550.

A good credit score can mean a big difference when it comes to obtaining a new installment loan of any kind: car or mortgage. The difference of 100 points in a person’s credit score can mean big bucks down the road.

A Real World Example

Some of these scores may seem intangible, so let’s look at possible real-world examples to see how it really works.

Let’s say that two people are going to a car dealership to buy a brand new sedan. The car costs $25,000, so both people will need to get a loan. 

The first person, Samantha, has a good credit score. When the dealership checks her credit history, she has an average score between the three credit bureaus of 730, which is considered “very good” to most creditors. When the lender sees that she’s a reliable and responsible person who keeps up with her credit, they offer a car loan with an Annual Percentage Rate (APR) of 3.65% (based on national averages). Let’s say the loan is over the course of five years (60 month term), and there’s no associated fees or down payments. Breaking this down, it would look like this:


Since Samantha has good credit, she got a good loan and only ends up paying $2,388.50 extra over the course of 60 months.

Risk - Get Good Credit


On the other hand, Brad, who has bad credit, wants to buy the same car for $25,000. His credit score is 599, which is considered “poor” by the standards of the creditors. When he’s at the car dealership, the dealership pings his credit history multiple times. People with bad credit will incur far more hard inquiries on their credit report due to the car salesman trying their hardest to get Brad inside his new car. The salesman will look for any lender that would accept Brad’s bad credit. The salesman finally finds one and offers a loan. Again, let’s say it’s a five-year term loan (60 months) but at an APR of 17.74%. Let’s break that down:


Because of Brad’s bad credit, he’s going to have to pay $12,878.30 in interest alone. That is 34% of the total payment of $37,878.30! Samantha is the clear winner here as she has good credit and ends up paying far less, but Brad is paying $10,489.80 more than Samantha for the exact same car. A person can buy a cheap, used Toyota Corolla for that $10k! This is where credit score and history come into play when determining a loan or finding a lender. Keep in mind that these numbers do not include any down payments or additional fees (such as title or transaction fees).



If you have any questions, feel free to give us a call at 877-212-2450!

We also invite you to click on the following link to see our reviews on yelp.

Get Good Credit - Yelp

  •   These guys are legit and professional at what they do and very quick as well very responsive and knowledgeable and they will do everything they can on your behalf

    thumb Edward N.
  •   I highly recommend Fix Your Credit Consulting. They helped remove my Bankruptcy and did it within 9 months. I'm very impressed. I was referred to them by a very reputable Credit Repair Attorney who works with them as well in between things, so they know their stuff and all of the legalities regarding fixing your credit.

    I worked with Mia Lopez who's the greatest and did a very good job of taking care of me and my friend tackling every issue or challenge that we faced. My credit score is now over 800 on all 3 of my credit reports. I referred my friend who had a 480 credit score and it's now over 700.

    They are one of the best if not the best credit repair companies out there. I will definitely work with them again if I need credit repair. Mia Lopez, you are the Greatest! Thank you so much for all of your help Mia. You deserve several raises. Job Well done! I'm one happy customer!

    God Bless!
    Cornelius Williams

    thumb Cornelius W.
  •   Sandra is the best!! Thank you for helping me and get all my negative items removed from my credit!!!

    thumb Carlos M.
  •   Fix your credit consulting was able to help me and family buy a home after fixing our credit, if you are looking for an honest reputable company to work with, Fix your credit consulting can help you like they helped me, I highly recommend them.

    thumb jon b.

Customer Reviews