What is a Good Credit Score? How to Get a Good Credit Score

What is a Good Credit Score? Do you want to know what a good credit score is? Then it won’t be a problem; you’ll simply learn everything there is to know about it. But what you will simply do to get the information is read. When you are, you will then get to know about it.

What is a Good Credit Score?

Not just knowing about it, but also how you can even get it. So it would be best if you continued reading to grab as much information as possible.

What is a Good Credit Score?

Generally speaking, scores between 690 and 719 are considered good credit in the commonly used 300-850 credit score range. Scores above 720 are also considered excellent, while scores between 630 and 689 are considered fair. Scores below 630 fall into the bad credit range.

FICO, the most widely used and best-known credit scoring system, and its competitor, VantageScore, both simply use the 300-850 range.

What Is a Good FICO Score?

A good FICO score simply lies between 670 and 739, according to the company’s website. FICO says scores between 580 and 669 are then considered “fair” and those between 740 and 799 are considered “very good.” Anything above 800 is considered “exceptional.”

According to FICO, the average credit score in 2021 was 716, which falls into the good range. FICO comes from Fair Isaac Corp., the company that first developed a credit scoring system. It then uses data about consumers from the three major credit reporting bureaus: TransUnion, Equifax, and Experian.

FICO scores typically express a consumer’s creditworthiness as a number between 300 and 850.

What Is a Good VantageScore?

FICO’s competitor, VantageScore, simply produces a similar score using the same credit report data from the three bureaus. (NerdWallet offers you a free credit score using VantageScore and also your TransUnion credit report.)

A good VantageScore simply lies between 661 and 780, which the company simply calls a “prime” credit tier. Scores above 780 are also considered “superprime,” while those between 601 and 660 are “near prime.” VantageScores below 600 is considered “subprime.” The average VantageScore 3.0 in July 2021 was 693.

What A Good Credit Score Can Get You

Having good credit simply matters because it will determine whether you can borrow money and how much you will pay in interest to do so.

Among the things a good credit score can help you get are:

  • An unsecured credit card with a decent interest rate or even a balance-transfer card
  • A desirable car loan or lease.
  • A mortgage with a favorable interest rate
  • The ability to open new credit to cover expenses in a crisis if you don’t have an emergency fund or it runs out.

A good credit score simply helps in other ways. In many states, people with higher credit scores simply pay less for car insurance. In addition, some landlords simply use credit scores to screen tenants.

So, whether you intend to apply for credit or not, having a good credit score is very beneficial.

What Is a Good Credit Score According to Lenders?

Lenders, such as credit card issuers and also mortgage providers, might even set their own standards for what “good credit” means as they simply decide whether to grant you credit and at what interest rate.

In practice, though, a good credit score is also the one that helps you get what you need or want, whether that’s access to new credit in a pinch or lower mortgage rates.

What Affects Your Credit Score?

On the list of what affects your credit score, there are two factors that simply have the biggest influence: Payment history, which is whether you pay on time, and credit utilization, which is how much of your credit limit you have in use.

Other factors that matter but carry a little less weight: are how long you have had credit, whether you have a mix of credit types, and also how frequently and recently you have applied for credit.

How to Get a Good Credit Score

Good credit habits practiced consistently, will then help you build your score. Here is what you simply need to do:

  • Pay bills on time. This is very important because payment history has the largest impact on all the factors in your score. A missed or late payment can then do tremendous damage to a credit score, and it can also stay on your credit report for up to 7 years.
  • Try to keep your credit card balances well below your credit limits; also, aim for credit utilization of less than 30%, preferably lower. High utilization then dings your score, but the damage will fade when you are able to reduce your balances and then the lower utilization shows up on your credit reports. You also might be able to lower utilization by getting a higher credit limit or becoming an authorized user on a lightly used card with a large limit.
  • Keep credit accounts open unless there is a compelling reason, such as high fees or poor service, to close them. Keeping older accounts open helps your average age of accounts, which then has a small influence on your score. Also, closing an account simply cuts into your overall credit limit, driving up your credit utilization.
  • Avoid making several credit applications in a short time frame. Credit checks for the purpose of credit decisions can then even cause a small, temporary dip in your score, and several in a short time can add up. That’s why it is important to research credit cards before you apply.
  • Monitor your credit reports and also dispute information you believe is incorrect or too old to be included (most negative information falls off after seven years).

Want to see what powers your credit? Then you should check your free credit score, and get personalized insights. Weekly updates then enable or let you track your progress.

FAQs

What Is A Good CS To Buy A Car?

If your CS is simply below about 700, then you should prepare for questions about negative items on your credit record when shopping for a car. People with major blemishes on their credit are routinely approved for car loans, but you might not qualify for a low rate. Read about what rates to expect with your score.

What Is A Good Credit Score To Buy A House?

You do not need flawless credit to get a mortgage. In some cases, credit scores can be in the 500s. But CS estimates the risk that you will not repay as agreed, so lenders do reward higher scores with lower interest rates. Read about your mortgage options by credit score tier.

What Is A Good Credit Score For Renting An Apartment?

Landlords or property managers generally are not even looking for immaculate scores; they are simply interested in your credit record. Learn more about what landlords really look for in a credit check.

Is 700 A Good Credit Score?

A 700 CS is considered good. You are more likely to be approved for credit if you have good credit (though lenders may consider other factors besides your score). And you are likely to get more favorable terms, like a lower interest rate.

What Is An Excellent Credit Score?

Excellent CS can simply fall between 720 and the highest score, 850. You do not have to get a perfect 850 — scores above 800 get you the best credit terms.

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