Hi! This site is back…It’s been a little while, but we’re planning on jumping back into the pool with both feet. Here goes!
Let me introduce you to my friend “Darnell.” He’s a good guy – but, like everyone else in today’s wacky economy, he took a few lumps in the late 2000s and early 2010s. He started to whip things back into shape, though, through some smart and savvy moves. He recently found out that his credit score is only 610. But he does know that a credit score of 610 can still get you…a few things. If you need credit for the basics.
One of Darnell’s early foul-ups meant that he had quite a bit of credit card debt – so much that he had to settle a couple accounts. (We’ll talk more about settling credit card accounts in the days to come.) Realizing that he needed at least one credit card for emergencies – or because he got tired of putting a debit card down for things like car rentals and hotels – he found one that could give him a “fresh start.”
It wasn’t a secured card (another topic we’ll cover later) but it was a card whose parent company was bought by Capital One. So…he lucked out and ended up with a Capital One card. And got a free credit score each month as a service of that card.
That’s how he found out that his score is a whopping 610.
610 might scare a few people, but not Darnell.
Considering the scale is something from 400 (having a “pulse” but little else in the credit world) to 830, his is deemed “average.” And he doesn’t care. At least too much.
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Let’s talk about two places where 610 isn’t going to be the death knell: Credit Cards and Auto Loans.
Credit Cards for People with Average Credit
They’re out there – credit cards for people whose credit is…average. (Think the “middle” of that range above – 400 to 830. That’s somewhere in the 600s.)
They fall into two categories: secured cards and subprime credit cards. We’ll let you Google “secured cards” on your own – his was in the second category, subprime credit cards.
“Subprime” has a rather malleable definition – 640? 650? Where IS the cutoff? Well, doesn’t matter – Darnell has been floating in the low 600s for a little while. He can still get a card.
The one he got – actually, he tells us, a couple years ago, with a credit limit of $500 – was from Orchard Bank. Here’s a Nerdwallet review of Orchard – whose card portfolio was sold to Capital One – and they give it a pretty good rating. I’d imagine Darnell would, too.
Auto Loans for People with Average Credit
As of this writing – late July, 2014 – there was an interesting discovery Darnell made over at one of the credit union sites – and this is actually rather important in the grand scheme. 610 is the cutoff at this particular credit union between “prime” and “subprime” when it comes to auto loans. That’s right – you are considered prime if your credit score is 610 or 830, at least according to one of the credit unions. In either case, your interest rate will be 5% on a new car.
Don’t believe Darnell? Here’s the link: Credit Union Auto Loan Sheet.
While the advertising for deals like “60 months, 0% interest” is for the super-prime people – you’ve usually got to be in the 800s to qualify – he doesn’t really mind that much, because he’s only going to finance a small percentage of his auto purchase anyway.
The new car is not THAT important to him, either…and that’s one of the cool things about his newfound ambivalence toward the credit score.
Let’s say he needs a minivan, but doesn’t necessarily need all the bells and whistles. No need to grab the 2015, or even the 2014. Get something used and save a decent chunk – plus finance it at the same 5%. Easy-peasy.
Yes, Credit Scores CAN Be Important
Here’s where I come clean: Way back when, I worked for one of the “Big Three” credit reporting companies, as a PR guy.
So I know more than the average person about these scores and how they’re compiled. But I’ve also learned a lot recently – as has Darnell – about what is important – Mortgages – and what isn’t that important when you’re looking for credit.
As we continue on this site, we’ll certainly share more tips, tricks, and strategies for credit, credit rebuilding, and what you should – or shouldn’t do with plastic. (In some cases, no plastic at all…)
This isn’t to say that credit scores are overrated, because in a lot of situations they’re rather important. But stop obsessing over a perfect, or even far away from perfect, score.