How Much Is A Good Credit Score?

Why is a credit score important and what is considered to be a good credit score?

Credit score: This is a number that represents the likelihood of defaulting on a given credit among other measures of creditworthiness. According to the scale, most consumers’ credit risk scores are between 300 and 850 and the FICO score is the most popular. It can therefore be seen that as credit score increases, the risk of the borrower to the lender reduces. This means that by having a good credit score one is in a better position to access credit cards, loans, and other forms of credit with ease and at reasonable rates. That is what many people ask, what can be classified as a good or bad credit score?

Here's an overview of the different credit score ranges:

800 and Above – This category is defined as exceptional because the rating is commonly associated with excellence. 740-799 - Very Good 670-739 - Good 580-669 - Fair 579 and Below - Indication of poor critical thinking.

As you can see, the higher the credit score is, the better generally, it’s above 700 and even above 740 to have the best chances to get approval for most types of credit products. Lenders consider credit history when approving loans and for anyone who wants to access a loan to purchase a car, a home, or start a business, he or she needs to have a clean record on credit. However, the practices of every lender vary since they have certain criteria and threshold levels. For instance, some mortgage lenders may approve you only if you have a score of 620, while others may insist on at least, 680.

How To Get a Credit Score

They use FICO scoring which is calculated in a formula that is not open to the public.

However, we do know the general components that make up this important number:

Payment History - 35 Credit Utilization - 30 Credit Age - 15 Credit Mix - 10 For the recent financial year, new credit applications – 10.

So, as you can understand, your payment history has the greatest influence, which means that it contributes more than one-third of your total score. That is why, it is always important to ensure that all your bills are paid on time. Second is your credit utilization rate or the percentage of the total capacity of your credit lines that you are already utilizing. It is these experts who advise that to minimize risks, your utilization should be below 30 percent. The more credit history a person has, the better for him or her. Besides this, making proper use of credit cards is also good for your score, and so is the ability to prove that you are capable of meeting the payments on different types of credits. Applying for new credit often can hurt your score in the short term, so consider applying for credit with caution.

Ways to Reduce Your Credit Utilization

It is very possible to raise your credit by 100 points or more if you apply the right measures towards the credit.

Here are smart tips to try:

• Making all payments on time is imperative – even being a single day late can cause one to accrue penalties and interest charges as well as see a decrease in the score. Most utilities provide the option to automatically pay your bill or receive a notification when it is due to be paid.
• Avoid utilization ratio – Balancing credit cards every month is unfavorable to you. Ideally, one should only be charging up to 30% of the total amount of credit lines that he or she has.
• DO NOT shut your old credit accounts – Getting rid of the oldest credit cards will reduce both credit length and credit diversity, thus lowering your credit score despite full payment.
• Avoid applying for new credit – Every time you apply, it causes a hard checkpoint that takes away some of your scores for some time.
• Do not apply for credit that you do not require – this is very important and should not be overlooked.
• Reporting of errors in disputes – There are times when you notice some errors on the credit reports and ensure that you make a complaint so that the information is put right.

You should not only check your credit reports and scores occasionally but do it as a routine to identify problems early.

If you do need help rebuilding credit, credit builder loans or secured cards are better options. These financial products are developed to assist those with either poor or fair credit scores.

In this study, the amount of attention paid to the idea of the importance of numbers is explored.

As is seen in the modern financial environment, credit scores are linked to almost every aspect of an individual’s life. Of course, it defines what loan and interest rate you are capable of getting as well as the rate that the lenders will offer you. But, still, more landlords and utility companies are now using credit checks on applications. Other employers also regard an applicant’s credit history as an aspect of character that reflects responsibility and honesty as well. You may even find your insurance premiums dependent on such factors as your credit ratings. The former implies that a higher score means that a firm is less likely to be a risk to do business with.

Since this three-digit figure helps one get the best rates in credit and approval on big-ticket essentials like a car, home, or college education, it makes great economic sense to keep it well-nourished. Ensure a score of over 700 is attained and sustained when doing your writing assignments. A good credit score proves that you are a responsible and thrifty client capable of receiving better rates and terms of loan that meet your objectives and needs.

Ready to boost your credit score? Call +1 888-804-0104 now for the best credit repair services near you! Our expert team is here to help you achieve financial freedom and improve your credit. Don't wait—get started today!