A good credit score falls between 700-739 on an 850 point scale (this range varies slightly by company). If your number falls in this range then congratulations!
We all know that we need money to live, but you may not have known how important your credit score is. Your credit score can determine whether or not you are approved for a loan, what interest rates you pay for loans and even if a potential employer will hire you.
It not only determines if you will be approved for loans, but it also determines the interest rate that you will be given. A low credit score can mean exorbitant and unaffordable monthly payments while a high one might mean lower monthly payments or even no payments at all!
What is my score? What are some of the components that make up your FICO Score? And how does this impact my life?
But before we get into the specifics of what your credit score means and why it’s so important, let’s talk about what a good credit score is.
What is a good FICO score?
A good FICO score is essential to your credit history. A high FICO score will allow you to borrow larger amounts of money and for cheaper rates.
The scoring system ranges from 300-850, so what the breakdown is?
Here’s the breakdown:
- 750+ – Excellent Credit.
- 700-749 – Good Credit.
- 650-699 – Fair Credit.
- 600-649 – Poor Credit.
If your scores are low, there are some steps that you can take to improve them before applying for a loan or mortgage. This includes paying off all outstanding debts on time, maintaining an active checking account with direct deposit and making sure any late payments don’t go into collections.
What is a good score to purchasing a car?
It can be hard to figure out what is a good credit score. A lot of people don’t know, but the answer depends on a few factors including your age and if you have any open lines of credit (credit cards). If you are looking to buy a car, then having a better score will help you get approved for that loan.
An great score is anything above 799. The majority of lenders look at scores between 720-850 when approving loans for cars or other types of purchases like mortgages or personal loans. Some lenders may even approve with lower scores if they believe there is sufficient equity.
You may have seen signs for car dealerships with “1.99% financing” or “low interest rates.” What does this mean?
A low interest rate is a good thing, but it can also be difficult to qualify if you don’t have a high credit score. Your good credit score represents how reliable you are as a borrower and what your chances of paying back the loan will be.
What is a good score for purchasing a home?
It’s important to know your credit score before you start looking for a new home, and if possible, try to get it in the high 600s or 700s. That will give you the best odds of qualifying for a mortgage with competitive rates and terms. If your credit isn’t so stellar, there are things you can do – like getting an installment loan or using some other kind of collateral – that might help boost your score enough that you’ll be able to qualify for financing. The key is knowing what lenders look at when evaluating applications; they’re not just interested in how much money someone earns!
A mortgage loan is the most common type of debt that you can take out to purchase a house or other real estate because they typically have more favorable terms than personal loans. But not having enough money saved up for your down payment could also make it tough to qualify for any type of loan, even if you do have an excellent credit history!
What is a decent credit score in the eyes of lenders?
Many lenders use “FICO” to calculate your credit score. A lender may have their own way of calculating your credit score, but they are likely using the same scale as FICO. The average American has a FICO credit score of about 695 or so. But, is that considered good? That’s hard to say because every lender has different qualifications for what constitutes an “acceptable” or “good” credit rating, but you can find out by contacting them directly!
What does a decent credit score get you?
If you’re a student, start building your credit score as soon as possible. If you’ve started to earn money, then it’s time to start paying your bills on time and opening up an account that will help build your credit.
If you’re married, be sure to speak with your partner about how both of your names should appear on any accounts; this is the best way to protect yourselves if anything ever were to happen between the two of you. Once established, having good credit can get you things like loans for homes or cars at low interest rates as well as better insurance rates.
It seems complicated but there are plenty of resources out there that will walk you through every step of establishing and maintaining a high credit score!
So, where do you begin? Follow these simple guidelines:
- Clear all unpaid debts.
- Do not open any new credit lines.
- Keep track of all payments made
How to get a good credit score
Here are five tips for getting the best credit possible:
- Pay all of your bills on time
- Keep balances low on all accounts
- Apply for and open new accounts only if necessary
- Annually, request a free copy of your credit report from each of the three major bureaus (Equifax, Experian and TransUnion) and
- Don’t let collections agencies call you or send letters to your home without first contacting them to verify.
Enjoyed this blog post on ‘What Is a Good Credit Score?’ Do share it with friends and family.