When it comes to getting a loan, your three-digit credit score is a major factor in determining your risk level as a borrower. Credit scores are typically categorized as excellent, good, fair, poor, or bad.
When it comes to the interest rate and terms of a loan, it is dependent on this same categorization of your credit score but is usually designated into two different categories. Those categories are prime and subprime. Prime covers the excellent and great credit scores, and subprime covers the fair, poor, and bad credit scores. There is also a super-prime designation that is sometimes used to refer to the top tier of excellent.
So, what does this mean for you if you are looking to get a credit card or a loan?