Levels of Credit Tiers

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There are many different levels of credit tiers that you're going to want to know about. Find out about the level of credit tiers with help from a certified financial planner TM professional with over a decade of experience in wealth management in this free video clip.

Part of the Video Series: Financial Planning
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Video Transcript

Hello, my name is Samantha Fraelich, and I'm a certified financial planner professional. I'm here today to explain to you levels of credit tiers. Now many of us have heard of our FICO score, and FICO stands for the fair Isaac corporation and they are the major producer of credit scores and are what most lenders will look at when deciding whether they want to loan you money or not. You can get a free credit score every year and there are multiple websites you can go online to obtain that report. But it's helpful to know what tier your specific credit score falls under to determine how easy or difficult it may be to obtain a loan or a credit card. Tier one. Those are credit scores from 760 to 850. You'll get those zero percent interest loans in the mail and you'll also be able to get the best interest rates possible in tier one. Tier two is 700 to 759. You'll still be able to obtain favorable interest rates, but not necessarily the best available. But you won't have any problem qualifying for a loan or a credit card. Level three. 660 to 699. You won't have any problem qualifying for a loan or a credit card but you'll probably pay a little bit more than those in tier one or tier two. A level four credit score is 620 to 659 and this is what's known as an average credit score. You probably won't have any problems qualifying but they will look into your background more deeply and it'll also cost you a little bit more than it will cost somebody in the upper three levels. Level five is a 580 to 619. Do you remember the term sub prime from the 2008 credit crisis? Unfortunately, this is what you're known as when you're in level five. It will cost you much more to get a loan or a credit card and they may require a co signer or some other type of collateral before they're willing to lend you money. The last tier where you can really obtain any credit or even a loan would be level six, and that's 500 to 579. They will most likely require some type of collateral or a co signer before they'll even consider lending you money. Anything beyond that and you need to do some work with a credit expert on how you can raise that credit score because it will be very difficult to obtain any type of credit or a loan from almost any financial institution. Again, I'm Samantha Fraelich, and I hope this helps you explain exactly what tier your credit score falls under.


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