It seems that everyone cares about their credit score these days, withinterest rates lower than ever and the easy money lending environment we havenow that comes with low rates.

The good news is, it is easier to get that loan for your house or car thanever before.

"Oh No, I Have a 622 Credit Score!"

Recently, I went to purchase a triplex to live in and keep as an investment,and when I got to the lender's office I found to my horror that I had a middlecredit score of  622. I will explain this in a moment, but even though thisscore was considered "bad" a few years ago, it turned out to be ok.

Your Middle Score

What do I mean when I say I had a middle credit score of 622? There are threemain credit bureaus, and banks are now in the practice of looking at your creditscores from all three bureaus, and then using the "middle creditscore" as an indicator of your credit performance.  They order areport that they call a "Tri Merge" or a 3-in-1 credit report. Thereare actually six main companies that banks like to use to provide this type ofreport, although there are many companies out there that will sell reports tothe public. If you order a 3-in-1 credit report on your own, the banks willstill insist on ordering theirs from one of their preferred companies. Once theydiscover your middle credit score, they use this as a very important indicatorabout your creditworthiness. Your credit scores can make or break your home loanor credit application.

What Does My Credit Score Mean?

Generally speaking, having a 650 credit score or higher means that you canfind many home loans at a good rate, and having a 720 credit score or higher isthe "holy grail", the highest score category where you can qualify forall the best loans like zero percent down or 125 percent financing. Creditscores go all the way up to 850, and all the way down to 350.

However, things change with time.  Where a few years ago only the peoplewith a 720 credit score got the best loans, today even people with a 620 creditscore or over have plenty of options for home loans at a decent rate.  Evenpeople with a 580 or more can enjoy a new home loan today.

As I found out, my  622 credit score in 1/2005 Sunday can remember himin her I get him out and get a fair and I think it can do is beginning: you alot yowasn't so bad after all.

How To Qualify For a Home or Car Loan

Who has the best credit? The answer is, people who have three lines of creditopen, no 30 day lates, and no more than 30 percent of their credit card balancesowing. these are the people who will have a 700 credit score or more. What ifyour credit record is not so good? I had a friend who lost her job and thatdivorce at the same time. She had 10 lines of credit open and four of them wentinto a delinquent or "charge-off" status. The term charge-off meansthat the credit card company "gave up" on collecting the debt.

My friend felt very ashamed about her past, and for six years avoided lookingat her credit. When she finally got her credit report she found that she had a620 middle credit score, very close to mine. Even though I had 11 accounts whereonly one was 30 day late. The credit score looks mainly at your last 18 monthsof behavior, so even though she had four delinquencies in her past her creditwas still considered ok. She qualifies for a home or car loan.

A Good Credit Score

However, to summarize some of the points made here, for the best credit makesure to 1) have 3 credit lines open  2) pay off 30% of your credit cardbalances and 3) avoid 30 day lates at all costs.

If you need a good credit score in a hurry, check out my e-book ImproveYour Credit Score In 24 Hours.

ABOUT THE AUTHOR
L. K. Hughes is author of the best-selling book "Improve Your Credit Score In 24 Hours".