When it comes to credit scores, there are a few different ranges that are generally accepted. 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. Having an average credit score is a great starting point for improving your credit score and eventually reaching an excellent rating. If you recently checked your credit score and found it to be lower than expected, it's important to take steps to improve it.
In this article, we'll explain what a fair and average credit score is for FICO and VantageScore, how to improve a fair and average credit score, and how to get a free credit report. Let's say two people with different credit scores apply for the same card with a variable APR of 15.74% to 23.74%. The person with an average credit score will receive an APR of 23.74%, while the person with excellent credit will receive an APR of 15.74%. Generally speaking, those with average credit will qualify for simpler cards with lower reward rates or no rewards at all, such as the Capital One Platinum Credit Card.
If you do qualify for a rewards card, the rates won't be as competitive as those offered to those with good or great credit.It's important to note that even if your credit score falls within the fair and average range, there's no guarantee that you'll be approved for a credit card that requires fair and average credit. Card issuers consider more factors in addition to your credit score, such as monthly housing income and payments. Most card issuers offer free credit scoring resources that can help you track your progress toward good credit.
Free Credit Scoring ResourcesThere are dozens of free credit scoring services available that offer your FICO or VantageScore for free, regardless of whether you're a cardholder. Some popular free resources include:
- FICO: FICO is the most widely used scoring model in the U.
S., and it was the first generic credit rating that incorporated trend data (i.e., how consumers manage their accounts over time).
- VantageScore: VantageScore produces a similar score using the same credit report data from all three agencies.
- CreditWise from Capital One: CreditWise offers free VantageScore monitoring.
How to Improve Your Credit ScoreIf you have dents on your credit reports, such as late or late payments or a bankruptcy, it could take years before those derogatory marks diminish and stop affecting your scores. In the meantime, certain financial products, such as secured credit cards, can help people who are working to increase their credit. Once you know what range your credit ratings are in, you can look for cards that fit you and your goals. And having a good score could help you qualify for more financial products with better rates, terms and credit limits.
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.
The Importance of Having a Good Credit ScoreAlthough 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. It's important to remember that having a perfect credit score isn't always necessary to qualify for excellent rates on loans and mortgages. If you can't qualify for certain products due to your current score, you may need to open a new account or add new activity to your credit report in order to start accumulating more positive information.
The higher your score is, the more likely you are to qualify for the best cards, mortgages and competitive loan rates...