Generally speaking, a Credit Score ranges from 300 to 850. It is a numerical rating used to measure a person’s creditworthiness. If you have a higher credit score, you can get a loan at a low-interest rate. A low credit score is likely not to get a loan and might get a loan at a high-interest rate.
The question now is, what is a Good Credit Score? A credit score from 670 to 739 is considered a Good Credit Score.
Although the Credit Scoring model varies from Lender to Lender, a good Credit Score generally is between 670 and 739. A Good Credit Score can help you access loans in unexpected circumstances compared to a person with a bad Credit Score.
Aside from lenders, many employees, Landlords, and insurance companies check your credit score to determine if you are qualified for a job and can become a potential tenant or policyholder.
Your Interest: What Happens When Your Credit Card Expires
What is a Good Fico Credit Score?
FICO is a top analytic company that helps business owners make the right decisions for higher growth, profit, and customer satisfaction.
According to FICO, a Good Credit Score is between 670 and 739, an excellent Credit Score is between 740 and 799, and an exceptional Credit Score is between 800 and 850.
Conversely, A poor Credit score starts from 300-579, while a fair Credit Score starts from 580 – 669. Based on this analysis, we can say that a Good FICO Credit Score is 670 – 739.
What is Vantage Score?
VantageScore is another data analytics company with its own Credit Score Scoring model. It, however, uses 300 to 850 ranges just as FICO.
A Good Credit Score by Vantage Score is considered 661 – 780, while an excellent credit score is 781-850. A bad credit score starts from 500 to 600, a Fair score from 601 to 660, and a very poor credit score of 300 to 499.
Why is having a Good Credit Score Important?
It is essential to have a good credit score. Aside from the fact that it can help you achieve your financial and personal goals, it can directly impact how you pay interest or fees once your loan has been approved.
In addition, a Good Credit Score can help you get a desirable car loan or lease. As mentioned earlier, you can qualify for a job with an excellent credit score. You can also determine your eligibility for an insurance policy.
Factors that Affect Your Credit Score
Several factors affect your credit score, and you must know these factors. The factors that affect your Credit Score include;
- Payment History: One of the factors that helps a lender determine your credit score is your payment history. Late payments affect your Credit Score and might lead to a poor credit score.
- The amount and total owed can also negatively affect your credit score.
- Your credit History Length, or how long you have had your credit account, can also determine your credit score range. People with an old account have a higher credit score.
Other factors that can affect and determine your credit score include your credit Mix and how frequently you have applied for Credit.
How to Improve Your Credit Score
If you have a Good Credit Score, you can still work harder to get an exceptional Credit Score; if you have a Poor Credit Score, you can also work hard to get a great one. Follow the steps below to improve your credit score;
- Pay your debt on time, as late payments might affect your credit score.
- Keep your credit card balance low. Having a low Credit balance can help your credit score.
- Apply for credit when necessary. Different types of loans can affect your credit score, so apply for loans when needed.
Lastly, Monitor and track your Credit Score, as this will help you know if you’re making progress and are qualified for a particular loan.
Your Interest: How to Improve Credit as a College Student
Frequently Asked Question
Is 700 a Good Credit Score?
As earlier stated, a credit score is between 300 and 850. According to FICO, any credit score of 700 and above is considered to be a good credit score. In other words, 700 is a good credit score; with this type of credit score, you can quickly get loans from lenders at a low-interest rate.
What is a Bad Credit?
A bad Credit score is said to be below 630 based on the FICO and VantageScore scoring models. Simply put, a credit score between 300 and 559 is considered poor.
What is a Fair Credit Score?
Unlike a bad credit score that starts from 300 to 559, a credit score between 580 and 669 is a FICO Fair credit score, but a fair credit score by VantageScore falls between 560 and 689.
How do I know I have an Excellent Credit Score?
An excellent or exceptional Credit score lies between 720 and 850 based on the FICO scoring model. On the other hand, an excellent VantageScore credit score ranges from 760 to 850.
Can I get a Loan with a Bad Credit Score?
It is, however, possible to get a loan with a bad credit score from online lenders like LendingClub, LendingPoint, Bad credit loans, and more.
However, you will get higher interest rates, and other factors might be considered before your loans are approved. It is advisable to compare interest rates before applying for any loan, whether you have a bad credit score or not.