Australia Finance

May 29 2017

What is a Good Credit Score? #fix #credit


#what is a good credit score
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What is a Good Credit Score?

A good credit score is what each of us aspires to. After all, a credit score is one of the important determining factors when it comes to borrowing money and getting a low rate when you do.

But trying to pin down a specific number that means your credit score is good can be tricky. When it comes to figuring out what makes a good credit score, there are a few different schools of thought.

What Can My Good Credit Score Get Me? Your good credit has earned you a great card to match. With benefits ranging from 0% balance transfer offers to better rewards on everyday purchases, why not take advantage today?

How Do I Rate?

Most credit scores including the FICO score and the latest version of the VantageScore operate within the range of 301 to 850. Within that range, there are different categories, from bad to excellent.

How does my credit score compare to others?

  • Excellent Credit: 750+
  • Good Credit: 700-749
  • Fair Credit: 650-699
  • Poor Credit: 600-649
  • Bad Credit: below 600

But even these aren t set in stone. That s because lenders all have their own definitions of what is a good credit score. One lender that is looking to approve more borrowers might approve applicants with credit scores of 680 or higher. Another might be more selective and only approve those with scores of 750 or higher. Or both lenders might offer credit to anyone with a score of at least 650, but charge consumers with scores below 700 a higher interest rate!

The Credit Score Range Scale

There are many different credit scores available to lenders, and they each develop their own credit score range. Why is that important? Because if you get your credit score, you need to know the credit score range you are looking at so you understand where your number fits in.

The Credit Score Range Using Various Scoring Models:

  • FICO Score range: 300-850
  • VantageScore 3.0 range: 300–850
  • VantageScore scale (versions 1.0 and 2.0): 501–990
  • PLUS Score: 330-830
  • TransRisk Score: 100-900
  • Equifax Credit Score: 280–850

With all of the scores listed above, the higher the number the lower the risk. That means consumers with higher scores are more likely to get approved for credit, and to get the best interest rates when they do. And they are more likely to get discounts on insurance. What is considered a “high” score depends on what type of score is being used.

If your FICO score is 840, for example, you’re just 10 points shy of the highest score possible and your credit is “superprime.” But if you have an 840 VantageScore (using version 2.0), it’s not as spectacular because you’re 150 points away from the highest possible score.

What s Your Score?

Don t assume your score is good (or isn t) just because you have always paid your bills on time (or haven t.) The only way to know whether you have a good credit score is to check. You can get your credit score free once a month at Credit.com. This is a truly free credit score no payment information is requested. In addition to the number, you ll see a breakdown of the factors that affect your score and get recommendations for making your credit as strong as possible.

What Can I Get With A Good Credit Score?

Some of the best credit cards from rewards cards to 0% balance transfer offers go to consumers with strong credit scores. You’ll find great credit cards for good credit here.

A good credit score can also get you a lower interest rate when you borrow. That means you will pay less over time.

For example, if you’re buying a $300,000 house with a 30 year fixed mortgage, and you have good credit, then you could end up paying more than $90,000 less for that house over the life of the loan than if you had bad credit.

So, in the end, it really pays to understand your credit scores and to make them as strong as possible.

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http://www.Credit.com/ Gerri Detweiler

I know some of these score factors can seem very frustrating. First of all, it sounds like you are on the right track in terms of getting your credit together after your divorce. So congratulations for that.

What are your grades for the other factors that make up your score such as mix of credit and inquiries? (You can find out here: get your free credit score ). Debt ratio sounds pretty good but if it s your utilization ratio then bringing it down a bit further might help, depending on the scoring model being used.

As far as the age of credit factor goes, the only thing you could possibly do there is to piggyback on someone else s card with a long credit history, but even then it s not certain that you d see an increase (especially if that person wasn t a relative at your same address). And that strategy has risks if they pay late your credit can suffer.

I am not sure which scoring model you are looking at, but it certainly sounds as if you continue on the track you are on you should definitely see improvement over time.

FLBiker77

Sounds like a good idea but doesn t work so well. My score is 742 because of lack of credit! I had the income, etc. but thought paying for everything was the smartest thing I could do. Boy was I wrong. I had amex and a couple of cap one cards. Amex is 36 yrs old. Well, I seen how all of the big credit companies wanted people with many credit cards, diverse credit, and high CL s. So I went out and got a several good cc s with high limits. Charged them carefully for Christmas and will pay them off in January. The 36 yr history combined with the new cc s brought my overall cc history down to just under 4 yrs! But I now have a great mix of credit (all but a student loan), many cc s with high limits (using responsibly), and feel like all I need to to is rotate my cards and pay in full and hope to see a score as close to 850 as I can get. I will try try to always keep a mtg payment, car payment, etc. It seems they want to see us in debt managing it well. And yes, it appears income does play a role in this as well. But I have seen some students with 18K incomes and very high CL s ficos.

dontgiveitmoreimportthanuneed2

– It seems they want to see us in debt managing it well

And therein lies the reason people should not be slaves to their credit scores.

If you re constantly supplying banks with steady (albeit low) interest, then of course you are sought after by lenders who want you paying them, instead of another bank.

If, on the other hand, you have a truly healthy spending habit where you pay for most things without going into debt, then what do you need the highest credit score for?

Personally, I think having a great credit score is important in early mid-life, before the first mortgage, but if you re older, say, and you re able to buy cars, or even property, outright, from savings, then you ve won the game!

Magik

I agree. but . There is always a but . I paid cash for my car and come time to borrow some money I got socked on the rate BECAUSE I hadn t had a car loan in 12 years .


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