What is Credit Anyway?

Credit is the ability to obtain goods and services before payment, based on trust that you will make the payment in the future. Credit is our financial buying power.

Credit Score
Your score is a number that represents the risk a lender (credit union or bank), takes when you borrow money. 
Your credit score calculation is your credit risk at a moment in time based on information found in your credit report.  The credit score scale is 300 – 850. To simplify, the higher your score, the lower the risk to the lender.

Exceptional Credit Score: 800 to 840
A credit score in the range of 740 to 850 are considered consistently responsible when it comes to borrowing and managing money. You have the lowest risk to a lender, and often the lowest interest rates.

Very Good Credit Score: 740 to 799
Credit scores between 740 and 799 indicates you are generally financially responsible. We are all human, and might pay a bill late, which will be indicated on your credit score.

Good Credit Score: 670 to 739
A credit score between 670 and 739 would have you slightly above the average consumer. You can still get competitive rates; however, the interest rates will be higher than the very good and exceptional category.

Fair Credit Score: 580 to 669
This range may indicate you have a few missed or late payments on loans, but nothing major. You will likely still be able to get a loan, but at a higher interest rate.

Poor Credit Score: Under 580
This means you have had significant damage to your credit history and may have defaulted on payments to several lenders. You likely won’t be able to receive a loan and should talk to your local lender (credit union or bank).

No Credit
Everyone starts somewhere, and usually without credit. Visit with your local financial on how you can start out on the right foot, or how you can prepare your kids for a good start to credit.


To learn more about why you should check your credit report, check out the BHFCU blog.