The threshold of what makes a high credit score is highly variable, depending on the institution and credit reporting agency. Generally, anything more than a 620 is considered good, and should provide the consumer with a loan, as long as his or her income falls within the boundaries of the loan limit. Higher credit scores may result in more favorable rates or more advantageous repayment plans, depending on the situation.
Fair Isaac, a company that does analytics and credit scoring, considers the threshold to be 620 for a high credit score, or at least a good credit score. Generally, if lenders see this score, there is very little problem in obtaining a loan of reasonable value. If the score is less than this amount, the loan may still be approved, but at higher interest rates or after further inquiry into the reason for the low score. Some companies, however, automate the process, leaving no room for explanations.
While 620 is considered a relatively high credit score, or at least enough to qualify for most loans, better rates are often reserved for those with even better scores. A score of 720, for example, is considered to be a high credit score that puts most consumers into an elite class of borrowers. The rates at this level may be the best a borrower can get, but some companies may reward an even higher credit score.
The top tier of the credit scores are considered those in the mid to high 700s. Those consumers with a score of 770 or above are considered a very high credit score. Those individuals will receive the very best rates. These rates may not even be advertised generally, just because there are not very many who can take advantage of them.
To obtain a high credit score, or improve a credit score, a borrower can do several things. For example, the borrower must have an acceptable debt ratio, usually between 36 to 42 percent of his or her income. Also, the individual must make payments on time and have no issues with collection. Those who have too many credit inquiries may also see their credit score suffer as a result.
From time to time, credit scores may vary a little, depending on the situation. For example, taking out a new loan may push a credit score down somewhat. As that loan, or another loan, is paid off, the credit score will go up. If a borrower has a high credit score, there is no need to worry about normal fluctuations.