Having a good credit score is essential for many financial goals. It can help you get approved for loans, mortgages, and credit cards with competitive rates and rewards. But what is a good credit score? And how can you get one?Generally, credit scores from 580 to 669 are considered fair; 670 to 739 are considered good; 740 to 799 are considered very good; and 800 and above are considered excellent. This article will explain what a good credit score is for FICO and VantageScore, how it can help you, tips for getting a good credit score, and how to check your score for free.
What is a Good Credit Score?A good credit score can help you receive better-than-average APRs from lenders and increase the odds of credit approval.
With good credit, you're more likely to qualify for a mortgage, lease, or car loan. Many of the best credit cards require good or great credit. If you want to benefit from competitive rewards, annual statement credits, balance transfers and more, you'll need at least a good credit score. Even if your credit score is in the good range, that doesn't guarantee that you will be approved for a credit card that requires good credit. Card issuers consider more factors in addition to your credit score, including monthly housing income and payments. Take a look at the best Select credit cards to get.
About six in 10 Americans (64%) worry that their credit rating will prevent them from reaching a financial goal, according to CreditWise from Capital One's Financial Milestones survey.
Tips for Getting a Good Credit ScoreIf you have bad credit or fair credit, follow these tips to help you increase your credit score:
- Pay your bills on time.
- Keep your balances low.
- Limit inquiries.
- Open new accounts only when necessary.
- Check your credit report regularly.
How to Check Your Credit Score for FreeYou can check your free FICO or VantageScore 3.0 credit scores through many banks and lenders. You can also use free online services such as Credit Karma or Credit Sesame. These services provide free access to your TransUnion and Equifax reports. Keeping track of your score can help you take steps to improve your score to increase your chances of qualifying for a loan, credit card, apartment, or insurance policy, while improving your financial health. According to the Consumer Financial Protection Bureau (CFPB), scores are often based on information in your credit reports. When you apply for credit, lenders review a detailed summary of your financial history, known as your credit report, to determine if you qualify for a particular form of credit.
Arguably, your credit score is more important in a mortgage application than with any other type of personal financing. If you can't qualify, you may need to open a new account or add new activity to your credit report to start accumulating credit. Conversely, paying a large credit card balance and lowering your utilization rate can increase your score. In addition, you often won't know what report and credit rating a lender will use before filing an application. And avoiding late payments and having low credit card balances could also help you maintain good credit. Many people start with a secured credit card, student credit card, credit building loan, or student loan. Closed and canceled accounts will remain on your credit reports and may continue to affect your ratings until they decline. If a creditor stops updating an old account that you don't use, it will disappear from your credit report and leave FICO and/or VantageScore with too little information to calculate a score. Although the above FICO and VantageScore charts show a general idea of how lenders can interpret different credit rating ranges, lenders and other companies may differ in their views on creditworthiness.
ConclusionHaving a good or excellent credit score is essential for many financial goals.
It can help you get approved for loans, mortgages, and competitively-priced rewards cards. To get there, pay bills on time, keep balances low, limit inquiries into your report, open new accounts only when necessary, and check your report regularly.