First of all, the highest Credit score that exists is 850; conversely, the lowest is 300.  Of course, the majority of people fall between those two extremes, and in fact, the average American Credit score is now about 690, but with the downturn in the economy and unemployment on the rise, it is likely that individual Credit scores will begin to fall, and that means the average Credit score will begin to fall right along with them.

Even though the average American Credit score seems pretty high, at 690, that is really not ìgood enoughî to get the best Credit terms from most lenders.  Most banks and other lenders use the Credit history and Credit score to determine whether or not they will lend you money, whether or not they will require collateral from you, how much interest they will charge you, and how long they will give you to pay back your loan.  Obviously, the better your rating, the better deal you will get at the bank.

Although there are no hard and fast rules that are uniform across the banking industry, most lenders reserve the best rates for people with a score of 720 or better.  That means that if you are just average (690, remember?), you are not likely to qualify for the best interest rates and terms.  Of course, the policies of the different institutions vary, and right now, a lot of bankers are turning down requests for loans for anyone who is well below the average American Credit score, and traditionally, even in the best economy, a score less than about 620 would get you the absolute worst deal.

Some economists predict that in a few years, however, the lenders will be unable to be as particular about whom they offer loans to and will have to be a bit more flexible about terms; the notion revolves around the fact that banks make money by lending it out.  That is a fact; that is why they do it; they donít lend you money just to make you happy.  That being the case, they must lend, and if the average American Credit score drops significantly, banks will have fewer options.  But that time will not come very soon or in the immediate future; right now, everyone expects banks to err on the side of caution, and that is just what they are doing.

When the economy is tough, the banking industry gets more conservative in its policies; if you are in the market for a big-ticket item such as a house or a car now (or will be soon), you should make every effort to keep your Credit history on the up and up so you can stand out as better than average and can get yourself the best deal possible when you need to borrow money.

If you know you have problems with you Credit score the best way to save money is to focus on Credit Repair