What is a Good Credit Score?

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 What is a Good Credit Score?


This is a question we hear all the time, what is a good credit score anyway? 

A credit score is a 3 digit number that ranges between 300-850. This number is calculated using the length of your credit history, payment history, and the amount of debit that you have. 

 A credit score is one factor looked at by lenders and creditors when deciding to offer you a loan. Credit scores can help the lenders determine the likelihood that the loan will be repaid. 

When looking at credit scores, everyone's financial and credit situations are different. There is no "magic" number that will provide you with better loan terms. 

Ranges of credit scoring models typically vary, but generally, credit scores from 580 to 669 are considered fair; 670 to 739 are good, 740 to 799 are very good, and 800-up are considered to be excellent. Credit scores in to 800 and above range are seen to have a more responsible credit history and lenders often feel more confident in their ability to provide them with credit or a loan. 

Most lender will look at a credit score of 670 and up as a low risk borrower, while scores between 580-669 have a more difficult time qualifying for decent loan terms. 

Of course different lender have different criteria for granting credit, so it is always important to research lenders and find out what terms they can offer based on your specific credit history. 

There are 3 major credit bureaus, Equifax, Experian, and TransUnion. Credit scores may vary across these three bureaus because not all creditors and lender report to all thee, so may only report to one. Even so, many lenders do report to all 3 bureaus, but you may an account with a creditor that only reports to one, two, or none at all. In addition, there are many types scoring models, and those scoring models may differ depending on the lender's preference for certain criteria. 

So, where can you go to check your credit for free? 

Checking your credit report regularly is one way to track of your credit, checking credit on your own does not have an impact on your score. 

What impacts your Credit Score?

 1. Pay your bill on time. We aren't just talking about paying your credit cards on time. Missing or late payments on other bill could result in a reporting to credit bureaus, which could impact your score. 

2. Pay off your debts as soon as you can. 

3. Keep your credit card balance below the limit. If you credit balance starts to creep towards your limit, that could impact your credit score. 

4. Apply for credit sparingly. Applying for multiple lines of credit at one time could impact your credit score. 

If you see your credit report and notice a mistake, reach out to the lender or credit bureau. You can also file a dispute with the credit bureau that has provided the report. 



Julia Ried - Realtor ®
Re/Max Gold



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