What Is a “Good” Credit Score? It Depends on What You're Buying.
People ask me this question all the time:
“What’s a good credit score?”
And I always answer with a follow-up:
“What are you buying?”
Because the definition of “good” changes depending on what you’re trying to finance. For a credit card? Maybe mid-600s gets you in the door. For a car? Sure, you might drive off the lot with a 680. But when we’re talking home loans, where we’re dealing with hundreds of thousands of dollars over decades? The difference between “good” and “great” could cost you the price of a car—or a college education.
Let me show you exactly what I mean.
The Real Cost of “Good Enough”
Last year, there were about 4.06 million existing homes sold in the U.S.
The majority were financed with conventional loans—the kind where your credit score plays a starring role in how much you’ll pay.
Just a couple of weeks ago, I spoke with a trusted friend in the mortgage business. I asked him:
“What kind of interest rates would a buyer see on a $500,000 home with 25% down?”
Here’s what he told me:
800 FICO Score: ~6.875%
700 FICO Score: ~7.25%
Now, that might not sound like much—just 0.375% apart—but over time, it adds up fast. Here are two real-world-style stories that illustrate how credit scores impact long-term costs—one focused on a "near miss" scenario and the other on a redemption arc. These can be used in presentations, blog posts, video scripts, or classroom discussions.
Story #1: The $95 Mistake – Lisa and the “Good Enough” Credit Score
Lisa was a responsible single mom living in Phoenix. She had always paid her bills on time, never missed a rent check, and prided herself on having a 700 credit score.
When she decided to buy her first home, her mortgage broker told her, “You’re in great shape.”
She assumed that meant she was getting the best deal.
The home she wanted was $500,000. She had saved up for a solid down payment—25%—and was approved quickly.
But something didn’t sit right with her. She remembered hearing someone (maybe me) say:
“Just because your score is good doesn’t mean it’s the best it could be.”
Out of curiosity, she ran the numbers again.
Her 700 score got her a 7.25% rate, which translated into $545,937 in interest over 30 years.
But had her score been just 60 points higher—760 or above—she could’ve locked in a 6.875% rate and saved $34,535 over the life of the loan.
That’s an extra $95 a month—enough to cover her daughter’s ballet classes, music lessons, and a tank of gas.
Moral of the story? Lisa didn’t do anything wrong.
But if she’d learned how credit scores really work—just a few months earlier—she could’ve done a whole lot better.
Story #2: The Credit Comeback – Marcus Goes from Denied to Dominating
Marcus was denied a home loan at age 33. He had a credit score of 638, mostly because of two old collections and a credit card he maxed out and paid late during a rough patch after a job layoff.
He was embarrassed. Frustrated. Even ashamed.
But instead of giving up, he dug in and educated himself.
He learned the truth about:
Validating and removing unverifiable collections
Lowering his credit utilization
Becoming an authorized user on his sister’s 20-year-old account
Paying on-time like his life depended on it
In 9 months, Marcus raised his score to 781.
This time, when he walked into the bank to apply for a loan on the same house—he was pre-approved instantly with a top-tier rate.
Had he bought with a 638 score, he would’ve paid over 8% interest, and his monthly payment would’ve been $412 higher.
Now? He had one of the best rates available—and got to put that $412/month toward building a real future:
a home renovation budget, college savings, and an investment account.
He didn’t just fix his credit.
He changed his financial destiny.
Let’s do the math:
30-Year Mortgage Interest Paid:
700 Score (7.25%)
Total Interest: $545,937.98800 Score (6.875%)
Total Interest: $511,402.40
Difference: $34,535.58
That’s $95.93 per month, every month, for 30 years.
And here’s the catch: you’re paying more for the exact same house. No upgrades. No better location. No extra features. Just more money—because of your credit score.
Where’s the Cutoff for the Best Rates?
Most mortgage lenders have a scoring bracket system. You’ll often see breakpoints around:
680–699 – gets you in the game
700–739 – “good,” but not optimal
740–759 – very good
760+ – best available rates
That means if your score is under 760, you’re most likely not getting the best deal your lender offers—even if your score feels “good.”
Why Credit Education Is Non-Negotiable
This isn’t just about a mortgage. This is about money leaking out of your life in small (and big) ways:
Higher interest rates on auto loans and credit cards
Larger security deposits on apartments and utilities
Skyrocketing insurance premiums (yes, your score affects that too)
Even cell phone providers and employers run your credit
Your credit score dictates the cost of living.
It controls the gatekeepers to the American Dream—and if you don’t understand how it works, you’ll pay more at every turn.
Final Thought: Keep the Money in Your Pocket
I’ll leave you with this:
If you had the choice between paying $34,000 more for a house—or putting that $34,000 toward your kids’ college, your retirement, or even your next property—which would you choose?
Same house. Same loan.
Different credit score = very different outcome.
That’s why I do what I do.
Because once you understand how this game is played, you stop donating money to the system—and start using the system to your advantage.
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