Having a good credit score is extremely important, and building a good score can be difficult. A credit score is influential on many financial decisions throughout life. It can dictate various things like a car loan, home mortgages, credit card approval, renting an apartment, and sometimes specific jobs. If you know what your credit score is will let you know what range you fall under so you can figure out what loans you could apply for.
So, the question is, what is a good credit score?
Range Scale for the Credit Score
Most lenders and other businesses generally use the FICO score, which ranges from 300 to 850. The higher your number is, the better it is. If you know the different ranges of credit scores, it will be important because then you will know your specific number’s category and what particular loans you can apply for. If you have a lower credit score number, this will make the lender’s risk higher to give out their loan money. If they do end up taking this risk, they could end up raising their interest rates which will cost you more over the years to pay back.
Bad Credit: 630 or Lower
Being in this range of a credit score is generally considered a bad credit score by lenders. You could fall into this category for a variety of reasons, including late or missed credit card payments, maxed-out credit cards, or bankruptcy as a whole. There are also many young people who fall into this category because they have not had enough time to raise their credit score or have even started it. Being in this bracket will make your interest rates higher and various fees, and it will also restrict your selection of credit cards.
Fair Credit: 630-689
Having a score within this range is considered to be an average score. This could be due to most likely having too much “bad” debt, as in having a high credit card debt that is close to being maxed out. If you are in this range, lenders will have a harder time trusting a person to give them a loan.
Good Credit: 690-719
If you have a credit score within this range you will be able to afford more choices of credit cards, you will be approved easier for loans, and you will be charged lower interest rates on these loans. Having your score within this range will frankly make it much simpler for you financially.
Excellent Credit: 720-850
If you fall under this final range you have what they call an “excellent” credit score. If you are in this bracket, you will be able to reap all the benefits of great credit cards, and you absolutely be approved for loans at some of the lowest interest rates that they can offer.
How To Check Your Score
Under federal law, you are allowed to check your credit score for free once a year. If you would want to check more than once a year, they will usually charge a fee. There are some other companies that can help you out as well, and they will provide you with a bunch of different tools. There are a lot of free credit score companies that do not require credit cards and will allow a free credit check and will help you with a variety of different ways to improve it. If you utilize these companies, you can get by checking your score more than once a year and can keep up with your financial situation.
Share this Post