It is not easy to answer the question to whats a good credit score. The minimum score required will vary as per the issuer. The factors that a lender evaluates will shift continuously with the economic trends. In the tough lending environment of today, you need a very high score to qualify for the best credit cards or house mortgages. About a couple of years ago, 720 was regarded as a pretty good score. Today, that same expectation has gone a notch higher to 760.
A FICO score of 760 marks the low end of the ‘excellent’ category. 720 to 760 will mark as `very good’ scores. Issuers of premium credit cards will not want clients with a score under 720. You will have a very hard time getting a credit card at a score of 620 or under. People with poor credit scores are now turning to secured credit cards.
Whats a Good Credit Score Building Formula?
Before you begin to search that formula, you have to understand that about fifty million people do not have enough credit history data even to generate a credit score. To understand how to build a good credit score, you have to assess the components of a good score. A FICO credit score can be broken down in to thirty five per cent with payment history, thirty per cent with credit utilization ratio, fifteen per cent with length of credit history, ten per cent with latest credit applied for and ten per cent with the kinds of credit used.
A high credit score is important as it will indicate that you are a lesser risk to lenders. It will earn you a lower interest rate as a borrower. Your credit score is akin to your pet dog. If you feed it well and look after its well being, it will be a good support for you.
Whats a Good Credit Score for your Financial Prospects?
Your credit score is a three-digit number that plays a significant role in your financial prospects. Credit scores will be categorized into various ranges. A good credit score may not get you the best interest rate on a credit card application or a house mortgage. When you maintain a good score, checking of all the three major credit reports is a smart way to identify things like missed payments and also things like errors on your report. Checking your credit report regularly will give you the option of correcting the inaccuracies. You can also identify and change any habits that may hold you back from a better credit score.
It is not difficult to get decent credit with a `very good’ credit score. But even this kind of score always does not guarantee that you will get the best possible interest rates. With an excellent credit score, it is easy to get credit cards approved at a good rate. You will be in a position to negotiate very good interest rates.
Whats a Good Credit Score Range?
Your financial image depends on a number which is referred to as a credit score. This score would be the difference between getting your loan rejected or accepted. Once your loan application gets approved, the credit score will have an impact on the kinds of interest rates you get. This difference will mean a lot when you are handling a large financial sum to get a house or a car. Even a single percentage point can make a big difference. A good credit score will matter as the interest rates are influenced by your credit score range. The credit scores are broken into ranges. This is done for the sake of simplicity in measuring. The commonly used credit scoring model is the FICO score. `Very Poor’ is 580 or below. `Poor’ is 580-620. `Average’ is 620-680. `Good’ is 680-720. `Very Good’ is 720-760. `Excellent’ is 760-850. These ranges will give you a feel of whats a good credit score.