Credit scores are generally divided into four categories: fair (580 to 669), good (670 to 739), very good (740 to 799), and excellent (800 and above). If your credit rating is lower than stellar, it's important to take action as soon as possible to work towards a good credit score and increase your chances of being approved for financial products such as credit cards and loans. To understand the cause of your bad credit, review your credit score and identify any missed payments or balances that have been left unpaid after the due date. To achieve a fair, good, or excellent credit rating, follow the tips below.
A good credit score can help you receive better-than-average APRs from lenders and increase the odds of credit approval. It can also help you qualify for a mortgage, lease, or car loan. Many of the best credit cards require good or great credit, so 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. If you have bad or fair credit, follow these tips to help you increase your score. Closed and canceled accounts will remain on your credit reports and may continue to affect your ratings until they decline. You may have a high credit rating, but a negative public record in your credit file can affect your chances of obtaining a loan. No matter where you fall on the scale, always remember that there are a number of factors that can damage your credit history and help you improve your score. Certain financial products, such as secured credit cards, can help people who are working to increase their credit.
Experian offers free credit monitoring for your Experian report, which in addition to a free rating and report, includes alerts if there is a suspicious change in your report. No matter how good your credit score is, a lender won't approve it if they think there are risks, such as your inability to pay. VantageScore lists factors based on their overall influence on determining a credit score, but this will also depend on your unique credit report. Your Credit Karma approval probabilities can also help you decide if a loan or credit card is worth applying for or not. Many people start with a secured credit card, student credit card, credit building loan, or student loan.
Keep in mind that a perfect credit score may not be necessary to qualify for excellent rates on loans and mortgages. VantageScore can rate your credit report if you have at least one active account, even if the account is only one month old. In addition, credit ratings can affect decisions not to provide loans, such as whether the landlord will agree to rent you an apartment. It was the first generic credit rating that incorporated trend data, that is, how consumers manage their accounts over time.