What is Considered Good Credit?

September 1st, 2015 by


Establishing and maintaining good credit is an important part of life. For most of us, the vast majority of the big-ticket items we want and need in life – a car, a home, appliances, etc. – have to be bought on credit. Good credit can make the difference between qualifying for a loan and being turned down – and exactly how good your credit is has a major impact on the interest rates you will be charged when you are approved for an auto loan – or any other kind of loan, for that matter.

There are three major agencies that score your credit based on how many active accounts you have open, how timely you are in making your payments and other factors. Between them, you have a combined FICO score somewhere between 301 and 850. The higher your credit score, the better. Generally speaking, credit scores are rated as follows:

  • Below 500 is considered bad credit
  • Between 501 and 600 is considered poor credit
  • Between 601 and 660 is considered fair credit
  • Between 661 and 780 is considered good credit
  • Over 780 is considered excellent credit

Many who have never borrowed – or who have borrowed very little – are surprised to find out that they have a low credit score. Others, who have had credit issues in the past, are not at all surprised to find that they have a poor or bad credit rating. Either way, though, you can overcome a low credit score. You can get an auto loan with low credit scores. What’s more, if you pay your auto loan regularly, it will help raise your credit score.

How to Overcome Bad Credit


There are lots of things you can do to overcome bad credit, but they can basically be boiled down to two:

  1. Eliminate negative marks on your credit report by contesting anything that may not be legitimate and paying off anything that is legitimate.
  2. Open new lines of credit – even if they are secured lines – and make regular, on time payments. This will show positive credit activity that will offset some of the negatives.

It may sound counterintuitive, but often the best way to overcome bad credit is to get more credit. Easier said than done? Yes and no. There are some credit avenues that are easier to explore for those with challenged credit than others. One is secured credit cards (basically you pay the credit card company the money and you borrow against your own deposit). The other – and this surprises some people – is auto loans. Many dealerships work with financing companies that specialize in working with people who have credit challenges. This admittedly means that you will generally have to pay a higher interest rate, but it also means that you will be able to improve your credit score, provided you make your payments on time.

Gettting a Car Loan with Less-Than-Perfect Credit

While there are several financing companies that are willing to work with people with challenged credit, they will often want to see you bring a little more to the table. This generally means that you will need to provide a down payment or a trade in – and preferably both.

It’s often a good idea for those with challenged credit to seek pre-approval before car shopping. This will allow you to go into the car buying process knowing ahead of time what your lending institution will offer you. Credit unions are especially good at working with their members on pre-approved auto loans, as they tend to treat members more as individuals with whom they want a lifelong relationship instead of as numbers.

At Woodmen Nissan, we help people with all kinds of credit to get auto loans. Do you have great credit? Talk to us about our competitive financing options. Do you have credit challenges? We can help couple you with the right lender for your situation. We can even help you get pre-approved for an auto loan and help you find the perfect vehicle to fit your pre-approved auto loan.