A borrower has a FICO score of 680 out of a possible 850.

Being a very in demand plumber and heating engineer means that John Mileham has a very steady and quite attractive income.  Based in Windsor, Detroit he has his own home and two small children.  Over the years he has obtained a mortgage to buy his house and several smaller unsecured loans.  He has manageable credit card debt. His credit rating is 680.

This rating is considered to be Good on this scale, where Very Good is the highest rating. A number of variables affect the credit score, but with 680, this borrower would be considered a low to medium risk by the lending institutions. 

The conclusion of the companies would be that John is capable of repaying their debts consistently and on time, with some expectation of minor issues throughout the life of the account. Any negative remarks in the credit report would have some impact on the score. The borrower would be offered fairly competitive interest rates and better terms than many borrowers with lower scores. The final overall terms of any credit or loan offering would of course also be dependent on John’s monthly income, monthly debt and his employment history.

The primary factors impacting this borrower’s score are as follows: the average balance of the existing accounts could be too high where lenders may feel that the borrower is living outside their means, which is a higher risk for lenders who expect full repayment. The amount of debt carried, compared to income, needs to be at an acceptable ratio to obtain additional credit or loans. Secondly, the length of time the existing accounts have been established may be too short for prospective lenders. While many consider 30 years of credit history to be optimal, a credit history of seven years is considered too short and three years of history inadequate. 

Finally, too many inquiries on the report would be harmful to John’s credit score. It suggests that the borrower is applying for too much credit in a short period of time. Lenders may be led to believe that the borrower has become financially unstable.