Tier-one credit describes borrowers with excellent credit. Tier-one borrowers are the most creditworthy because of their high credit scores and the likelihood they'll repay their debts. Because consumers who earn tier-one status have high credit scores, they receive the best terms on credit cards, loans, and leases.
Tier 1 credit is considered the best, and will generally qualify you for the most favorable loan terms. That could translate into savings of hundreds or thousands of dollars over the life of a loan.
Qualifying Scores
Using the FICO scoring model, in which credit scores range from 350 to 850, scores of 660 to 700 typically qualify for Tier 2 credit.
Tier IV is the highest tier in which you can directly apply for a card. Cards in this tier have annual fees of around $500 and come with significant perks. Tier IV cards earn points and miles, but not like Tier III cards do. That's because Tier IV cards are focused on luxury travel, perks, and credits.
In general, Tier III represents an average credit score in the low to middle 600s, meaning relatively unfavorable terms for the borrower. Auto lenders may extend credit for Tier III borrowers, but at expensive "sub-prime" rates of interest.
Tier 5: Invitation-Only Cards
These types of high-society cards have no credit limit, and all of the perks that come from lower-tiered cards. And credit score doesn't even matter for invitation-only cards—even if you have a perfect score, that's not enough to get an invite.
Tier 4: A good credit score ranges between 650 to 669 and means you're “responsible with my credit and usually make my payments on time.” Tier 5: A fair credit score ranges from 630 to 649 and means you “try to be responsible with my credit but have had some recent credit challenges.”
Average Interest Rate Per Tier
This will vary, but based on the data we've found in May 2020 for new cars, Tier 1 borrowers (with credit scores in the 700s and 800s) can expect to pay an average of around 4% APR on their loan for a new car.
70% of U.S. consumers' FICO® Scores are higher than 660. What's more, your score of 660 is very close to the Good credit score range of 670-739. With some work, you may be able to reach (and even exceed) that score range, which could mean access to a greater range of credit and loans, at better interest rates.
The credit scores and reports you see on Credit Karma should accurately reflect your credit information as reported by those bureaus. This means a couple of things: The scores we provide are actual credit scores pulled from two of the major consumer credit bureaus, not just estimates of your credit rating.
For most loan types, the credit score needed to buy a house is at least 620. However, a higher score significantly improves your chances of approval, as borrowers with scores under 650 tend to make up just a small fraction of closed purchase loans.
Having a credit score over 800 isn't just good. According to the FICO credit scoring system, it's exceptional. Although both the FICO and VantageScore credit scoring systems go all the way up to 850, you actually don't need to hit 850 to reap the same benefits as those with a perfect credit score.
A perfect credit score of 850 is hard to get, but an excellent credit score is more achievable. If you want to get the best credit cards, mortgages and competitive loan rates — which can save you money over time — excellent credit can help you qualify. “Excellent” is the highest tier of credit scores you can have.
Fortunately, most cards can be classified into three major categories based on the features they offer: rewards credit cards, low interest and balance transfer cards, and credit-building cards. This classification can help you narrow down your choices.
According to Weiss, one of the most recommended cards for high-net-worth individuals is The Platinum Card® from American Express . While this card comes with a wide range of perks that make it seem too good to be true, it also comes with an annual fee of $695 (See Rates), which is higher than most other credit cards.
What is a black card? A black credit card is a type of extremely exclusive credit card that is almost solely reserved for the ultrawealthy. Typically, the cards are available on an invitation-only basis. The threshold for entry into this elite echelon of card ownership is incredibly high, as are the annual fees.
Credit bureaus suggest that five or more accounts — which can be a mix of cards and loans — is a reasonable number to build toward over time. Having very few accounts can make it hard for scoring models to render a score for you.
What is the Silver Credit Card? The Silver Credit Card is for customers who want maximum value from their credit card as well as complete flexibility in repayment convenience.
Grade C. If have a credit score between 630 and 679, you have fair credit. Here is where things can start getting kind of dicey. Having a score in this range means that you probably have too much debt or more than a few late payments. You might even have a collection notice or two against you.
Credit Scores Below 550
Have a score of 550 or lower? You are generally out of luck unless you can bring your score up. Even if you do get approved, it will require a large down payment. You would be better off using that money to buy a used car than to take on monthly payments with an extremely high interest rate.
A 2nd tier lender, also known as a non-bank lender, is a lender who doesn't hold a banking licence. They usually come in the form of a building society or credit union. While the absence of a banking licence might seem scary, it just means they source their own wholesale funding from other sources.