What is 'A-Credit'

A-Credit is a top letter grade for a lender to assign to a borrower. Lenders use a credit grading system to qualify borrowers. The higher the borrower's credit grade, the lower the interest rate offered to that borrower on a loan.


Lenders base an A-Credit grade on many factors. Some of these factors might include a borrower's credit score from the Fair Isaac Corporation, also called a FICO score, in addition to the borrower’s debt-to-income ratio, loan-to-value ratio and past delinquencies.

Various lenders use different grading scales, so letter grades are not always associated with the exact same FICO number scores. For example, some lenders might consider a FICO score of 720 to be an A, while some others might not. Some lenders also further categorize FICO scores by applying a plus or minus to the letter grade, while some use strictly A, B, C, D and so on. A plus or minus grade of credit gives more depth to the score. For lenders that use pluses and minuses, a grade of A+ would indicate higher credit worthiness than a score of A-.

Why A-Credit Matters

Borrowers don’t need a perfect credit score to qualify for a loan, but their scores do matter. Higher scores or letter grades help them qualify for lower interest rates and longer terms, making it easier to make timely payments and maintain their excellent credit scores.

How to Get A-Credit

FICO scores are based on several factors: payment history, total debt owed, length of credit history, types of credit and new credit. Lenders typically reward high FICO scores with a higher letter grade.

To achieve a better score, borrowers should focus on establishing a good credit reputation. To do this, borrowers need to make payments on time and keep a low amount of debt or show they are making consistent progress toward paying off debts. They should also use more than one type of credit, such as credit cards as well as a mortgage or car loan, and make few hard inquiries on their credit score. A longer credit history can also help boost a score because it shows more data on the borrower’s payment habits.

Under federal law, consumers can access one free credit report per year from each of the three credit reporting bureaus. These reports do not count as hard inquiries, which cause a small deduction to a borrower’s credit score. Checking these free reports annually can help borrowers assess their performance, determine whether they need to improve and make changes accordingly.

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