It's a common misconception that you only have one credit rating. In reality, there are many credit scores. It's wise to check your credit ratings regularly. In this article, Select explains what a good credit score is for FICO and VantageScore, how good credit can help you, tips for getting a good credit score, and how to check your score for free. Having a good credit score can help you get 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.
Check out Select's best credit cards for good credit. According to CreditWise from Capital One's Financial Milestones survey, about six in 10 Americans (64%) worry that their credit rating will prevent them from reaching a financial goal. If you have bad or fair credit, follow these tips to help you increase your score. That could be one of the reasons people's credit ratings tend to increase as they age; their accounts have simply been open longer. According to the Consumer Financial Protection Bureau (CFPB), scores are often based on information in your credit reports.
Keeping track of your score can help you take steps to improve it and increase your chances of qualifying for a loan, credit card, apartment, or insurance policy, while improving your financial health. This means they may qualify for higher loan amounts, higher credit limits, lower down payments, and better bargaining power with loan and credit card terms. There are certain types of loans, such as home loans, that are difficult to obtain with a score in this range, but there are still options for obtaining a mortgage with bad credit. And avoiding late payments and having low credit card balances could also help you maintain good credit. It was the first generic credit rating that incorporated trend data; that is, how consumers manage their accounts over time. 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.
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. If you're wondering how important it is to earn and maintain a good credit score, the short answer is very. In addition to qualifying for a credit card, your score can also have a significant impact on the APR and other terms of your account. VantageScore can rate your credit report if you have at least one active account, even if the account is only one month old. Experian offers free credit monitoring for your Experian report which includes not only a free rating and report but also alerts if there is any suspicious change in your report. If you want to keep your number at the higher end of the scale it's important to keep up with paying your bills use your approved credit and limit inquiries.
When you apply for new credit you are not told what that particular lender's exact cut-off point is between a good and bad rating.
Tips for Improving Your Credit ScoreIf you want to improve your score there are several steps you can take:
- Pay all bills on time
- Keep balances low on revolving accounts
- Pay off debt rather than moving it around
- Don't close unused accounts
- Check your report regularly