Let’s do this thing.
It’s that special time when I look at a specific credit score, today a “620 credit score.” This is certainly a more common credit score, largely because it serves as a threshold for both creditors and borrowers, which I’ll explain shortly.
As always, be sure to apply the proper credit score scale to determine if said credit score is good, bad, average, or flat out ugly.
Fico Score Below 620 is Subprime
Assuming we’re dealing with the more popular Fico score, a 620 credit score would put you on the cusp of a bad credit score and a below average credit score.
More specifically, you’d be at the bottom of the average credit score bracket and the top of the bad credit score bracket. The best of the bad, so to speak, which obviously isn’t all that good.
Put another way, most mortgage lenders consider credit scores below 620 “subprime,” meaning you’d be subject to a higher mortgage rate if you were even approved at all.
So clearly a 620 Fico score isn’t one to strive for, as you’ll have difficulty obtaining financing for all types of loans, including credit cards.
And you’ll be stuck with above-average interest rates if you are approved.
If you have a 620 Fico score, you’ve likely got some negative information on your credit report, such as a missed payment, or perhaps something more severe such as a charge-off.
You may also have a limited credit history, and what you do have isn’t all that sparkling.
In any case, you’ll want to get to the bottom of it sooner rather than later because it will cost you money in the form of higher interest rates.
620 VantageScore = D Letter Grade
As far as VantageScore is concerned, a 620 credit score would put you in their “D” credit grade bucket, which clearly doesn’t bode well.
It’s not all that far from the lowest credit score, a 501, and nowhere close to the highest credit score, a 990.
Long story short, if you have a 620 VantageScore, your credit score is well below average, which for VantageScore is around 750, and certainly not good.
It’s not terrible, but you’ve probably got some fairly serious negative information on your credit report.
Most likely something more severe than a 30-day late payment, such as a collection or a charge-off. You probably also have high balances and a limited credit history, though scenarios can obviously run the gamut.
Regardless, a credit score monitoring program could make sense in this situation, as it would allow you to see what’s holding you back, and also what it would take to improve your credit score and get back to that excellent status you’ve been dreaming of.
Remember, if your credit score is this low, it is hurting you. No ifs, ands, or buts. It’s not just an ego blow. You will be paying more money for everything that has to do with credit. And even things like auto insurance can be significantly more expensive, so take notice and get to work!
(photo: Leo Reynolds)