Credit score vs Credit rating

[WarthogWrangler]

Woke up today to see that I’m finally in the “fair” credit zone. My scores all rose above 580. So my question is how much do the actual scores play in getting approved for things? The difference between “poor” and “fair” is 1 point so if someone has a 579 poor rating will they see better chances at 580 with a “fair” rating? What if someone has a 580 and the next person has a 669 which is still “fair”. Would they both have the same chances at approval?

[RonM21]

The scores will always play a bit of a role because they are pretty much a reflection of the info on your reports.

The info on your reports is what is more important. A 579 vs 580 would really not make much difference at all, regardless of the rating. Those scores might as well be one and the same. However, 580 vs 669 in your example is different. The person with the 669 likely has less negatives or derogs on their report, leading to a higher likelihood of approval vs the 580 score. And again, that goes back to the info in your reports.

At the end of the day, the lenders could probably care less what rating you have. It's all about the risk of what kind of borrower you appear to be, and your ability to pay back. That comes from all of the info in your profile and history.

[Brooklyn2018]

+1 @RonM21

VERY well stated and plainly put!

A picture of one’s credit report speaks a 1,000 words. Scores only provide a “caption.”

😊

[Anonymous]

"Ratings" are irrelevant.  Scores are what matter.

Depending on where you look (whose fluff chart/table you see) ratings are all over the place.  It's all very lender-specific.  One lender may give their top tier rates to anyone with a 700+ score.  Someone else may require a 740+ score.  In these examples, the "rating" of excellent would suit a 700+ or 740+ score, respectively.

Profile > Score:

It's also crucial to understand that overall credit profile (all data on your CR) means more than just score.  Two equal scores can come from 2 very different profiles.  In fact, a lower score under certain circumstances can be "better" than a higher score simply based on the profile data.  For example, take two 720 score profiles.  One is young/thin/clean and the other is old/thick/aged dirty.  If the dirty file has negatives from 5-7 years ago and is otherwise clean, the aged/thick/recently clean [last 5 years] file is likely going to be much stronger than someone else with 1.5 years of credit history and 3 accounts yielding that same 720 score.  If both of these people applied for the same loan for example, the thicker file may be seen as more favorable.  Conversely, if both of these people applied for a Discover, Capital One or other sort of entry-level CC that appreciates young/thin files, the thicker aged 720 file in this case may be viewed as less favorable for that product. 

[RobertEG]

As stated by Fair Isaac, their three-digit score is basically a risk analysis of your liklihood of becoming delinquent on your credit within the next 2 years.  It does not take into account certain other information, such as income, total debt, or secondary factors, such as liklihood of being sued or having liens place on credit that they might extend.

Creditors place their own additional criteria on credit evaluation, particularly when the requested amount of credit is high.

The most common example are mortgage underwriting criteria, which always incuded factors in addition to just a FICO score, such as income, total debt, unpaid collections, liens on delinquent debts, statementst hat the consumer only paid part of prior accrued debts, as evidenced by settlement for less special comments in their credit report, etc.

Simply stated, a credit score is not intended to be a thorough evaluation of a consumer's credit risk, and is only one factor in a creditor's lending determination, and many use their own separate or additional underwriting evaluaitons, of which FICO score may only be a part.