Insider Reveals Credit Score Tiers
Here are the three main takeaways from this episode of the 720 Credit Score podcast:
- Credit lives in tiers, not on a single ladder. Your tier decides access, pricing, and even product design.
- Near-prime borrowers are the most sensitive to rule changes. Good intentions can shrink their access overnight.
- Deep subprime borrowers still borrow. If mainstream options disappear, costlier and riskier options fill the gap.
I sat down with Patrick Brenner to map the real credit landscape. We walked through five tiers from super prime down to deep subprime, why lenders treat each tier differently, and how policy ideas like interest caps can redraw the map. If you have clients rebuilding after a hit, or you are rebuilding yourself, knowing your tier tells you what to expect, what to watch, and how to move up.
Frequently Asked Questions
- What are the five credit tiers and their typical FICO ranges?
- What advantages come with super prime?
- What should prime borrowers expect if they slip?
- Why is near-prime access so fragile?
- What happens to subprime borrowers when mainstream credit tightens?
- What is deep subprime and why do lawmakers often miss it?
- How do secured cards fit into rebuilding?
- Do interest-rate caps help or hurt near-prime and below?
- Can banks deny checking accounts and what data do they use?
- How do you climb from a lower tier to a higher one?
FAQ: What are the five credit tiers and their typical FICO ranges?
The five credit tiers and their typical FICO ranges are super prime at roughly 760 to 850, prime at 680 to 759, near-prime at 620 to 679, subprime at 580 to 619, and deep subprime below 580. These bands are directional. Lenders still use their own cutoffs, but the pattern holds across markets.
FAQ: What advantages come with super prime?
Super prime advantages include lower pricing, richer rewards, easier prequalification, and wider product choice. Lenders compete for these borrowers, fees tend to be lower, and approval pipelines move faster, even though income and identity still have to be verified by law.
FAQ: What should prime borrowers expect if they slip?
Prime borrowers who slip can expect pricing to change and product terms to get tighter. A single late payment can move a profile from the top of prime toward the middle, which can reduce limits, bump rates, or swap a no-fee card for one with fees or thinner rewards.
FAQ: Why is near-prime access so fragile?
Near-prime access is fragile because these borrowers are often recovering from shocks like medical bills, divorce, or a job loss, so any policy or pricing shift pushes them out first. When rules cap returns too tightly, lenders respond by shrinking approvals, which lands hardest on people who were about to climb back into prime.
FAQ: What happens to subprime borrowers when mainstream credit tightens?
When mainstream credit tightens, subprime borrowers still borrow, but they do it through costlier channels like buy-here-pay-here auto lots, weekly furniture financing, and fee-heavy services. The need is the same, the providers change, and the total cost of credit rises.
FAQ: What is deep subprime and why do lawmakers often miss it?
Deep subprime is the tier below 580 where access to banks and credit unions is scarce, and borrowing becomes a survival tool for broken tires, rent gaps, and utility shutoffs. Lawmakers often miss it because eliminating a product feels protective on paper while pushing people toward informal or illegal options in practice.
FAQ: How do secured cards fit into rebuilding?
Secured cards fit into rebuilding by turning cash collateral into a small limit that reports like a normal revolving account. A $300 or $500 deposit becomes the line, on-time payments rebuild history, and after a clean streak many issuers graduate the account to unsecured.
FAQ: Do interest-rate caps help or hurt near-prime and below?
Interest-rate caps can help headline prices but often hurt access for near-prime and below, since lenders pull back when they cannot price for risk. Proposals like a national 10 percent cap that have been floated by figures such as Josh Hawley, Bernie Sanders, and Alexandria Ocasio-Cortez would likely concentrate credit among super prime and prime while approvals fade for everyone else.
FAQ: Can banks deny checking accounts and what data do they use?
Banks can deny checking accounts and they use specialty banking reports that log things like unpaid overdrafts or fraud flags. Similar to credit bureaus such as FICO scores in lending, these banking databases help institutions screen applications, which is why past account issues can block even basic services.
FAQ: How do you climb from a lower tier to a higher one?
You climb from a lower tier to a higher one by building clean, recent history that outweighs the past. Start with a secured card, keep utilization low, pay on time, add a second and third tradeline over time, and let six to twelve on-time months compound. Many filers and heavy-hit profiles can reach the 700s within 12 to 24 months of disciplined use and low balances.
Disclaimer: The content on this blog is for informational and educational purposes only and does not constitute legal or financial advice. Watching our videos and reading our blogs does not create an attorney-client relationship. Always consult a licensed bankruptcy attorney or financial professional about your situation.
