What is a Good Credit Score?

It’s difficult to gain approval with credit cards or loans if your credit is weak. Credit scores are given by credit bureaus such as Experian, Trans Union, and Equifax. These credit bureaus issue three letter scores to all people with active and inactive credit or outstanding loans. This score gives potential lenders insight into your credit history. For every delinquent or outstanding balance, your score will go down. All credit obligations that are met on time allow your score to increase.

An excellent credit score ranges from 750 and up. This score gives the title of A-1 credit to a borrower’s credit history. To receive this high rating, all credit must be in good standing with balance paid on time. Having too much credit can look bad even if all accounts are current. It only takes a few credit accounts to establish A-1 credit.

So, what’s a good credit score you ask? A good credit score would have to be close to 700. Anything lower than 700 is considered fair. The highest a credit score can reach is 850. It’s not often that lenders and credit card companies see this figure. Someone with credit this excellent can often walk away with whatever loan they want.

It’s almost impossible to receive the same credit score from each credit reporting agency. Agencies use different scoring software. Therefore, the score generated by each agency will differ by a few points. So if you receive a good credit score of 750, the other agencies may report higher or lower.

The credit scoring method is used in determining if an applicant is a lender risk. Lenders, creditors, and mortgage companies will reject your request for credit if your score is low. A good score indicates that an individual is likely to fulfill the terms of the loan. Good credit scores can also make it simple to obtain low interest rates. When applicants with good credit scores are approved for credit, it’s usually at a low interest rate.

What’s a good credit score is a common question because a good credit score is seen by very few Americans. A number of circumstances can occur that will force one to live on their credit. Once you start spending more money then you generate your credit score will suffer. A good credit score can only remain good if the credit holder is wise when it comes to spending. Neglecting your credit score is hard to recover from. Points decrease each day an account is past due. That is, if the credit company reports it, they usually do.

Other factors that will affect a good credit score, is a low credit balance. If you have 3,000 on a credit card, but owe 1,500, it will impact your credit score. Your available credit line should always remain 70 percent above the balance. Your credit score will be affected by the remaining credit line if it’s too low.

Bankruptcy’s, repos, and errors will also cause drastic changes in a good credit score. Errors on a credit report can be corrected once spotted. You can view your credit report by requesting a free copy once a year from the three major credit reporting agencies. This doesn’t provide a score, but rather a report. It’s something that should be done consistently to make sure there are no mistakes or credit problems you may be unaware of. Once you are made aware you can get any issues fixed and be on your way to a good credit score of your own.