What Is A Good Credit Score Rating?

A credit score is a numerical value that signifies how creditworthy a borrower is and enables the lender to recover the money borrowed. Credit scores are usually a number that may start from 300 and go up to 850. However, the way you look at lenders in general is that the higher the number the lower the risk.

A good credit score is generally considered to be anything above 700 on the FICO scale or above 760 on the VantageScore scale.

Most scores fall into the "fair" or "good" range: 

"Exceptional" Scores Above 800 "Very Good" Scores: 740 to 799 "Good" Scores: 670 to 739 "Fair" Scores: 580 to 669 Scores Below 580 Are Considered "Poor"

Although minimum score criteria accepted by various lenders for certain kinds of loans or credit cards vary, here is a general rule:

The ratings regarded as excellent might start at 670 and upwards. If not all the loans or credit cards on the market allow, here is where you should be able to qualify for most if not all. A credit score of 740 and above is said to be Very Good to Exceptional; this suggests most lenders would see you as a low-risk taker and will award you the best prices. Interest in learning the factors influencing credit score:

Information found in your credit report generates a credit score with given numerical values. This is the reason your score varies every time your credit report shows an item.

Let's review some of the biggest factors affecting your score:

1. Payment History  Thus, the most significant component is your payment history which accounts for 35% of your score. That is why it is important to pay on time and ensure that on the credit report, the payment status reflects a positive one to ensure a good score.
2. Credit Utilization This is used at 30% of your score, and it determines your credit utilization rate, which is the amount of credit you are using for the total credit available to you. A general rule of thumb is that one should maintain less than 30% credit card balance against their respective credit limits.
3. Length of credit History The final of the 15% factors is related to the length of time that credit accounts have been active. Therefore you see having a long open line of credit on your credit report increases your credit score. This is why, the old accounts should remain open, while the cards or the use of the account should be closed.
4. Credit Mix The next 10% depends on the quality of accounts you have in the business. In general, it is easier if a portfolio contains both kinds of loans and credit card accounts. This proves that you are capable of handling and providing repayment for all sorts of credit. This means that if you have a mortgage or an auto loan line you open it can assist your score.
5. Recent Credit Activity I Hard Inquiries This part can be worth up to 10% of your total score. It comprises newer accounts that have been recently opened and credit searches for which you have conducted. Some factors that can decrease your score include new accounts or inquiries, and this is reduced as time passes and as your credit history improves.

On-Time Payments Are Key!

From the above analysis, the most important aspect of credit score that one needs to pay to ensure that they build good credit and also to ensure that they do not have a bad score is paying your bills on time at 35%. The number of days that you take to pay your bills is the most crucial aspect of credit scores, especially when it comes to late payments. If you have some late payment in the past, it will remain in your credit report for the next 7 years. The time it will take to restore your credit score is usually affected and in the first year, it takes an even bigger blow. But as it ages off your credit, the influence will reduce as the account deteriorates and becomes older. While your score may usually get back to the previous level in the next 12 to 24 months after a late payment, your behavior otherwise remains good.

Monitor Your Credit Report

The first thing that one has to do is to get a credit report credit report is free and this will help you to determine your current position. You can then figure out whether or not there are such errors or fraudulent credit accounts that could be lowering your score. On the same note, ensure that you check what open credit lines are reported. Having more than one account or using credit above a certain percentage of the total credit limit may affect the credit rating. It will also help you ensure that you are among the first to know or detect any instance of fraudulent activities or identity theft.

Ways to Increase Your Credit Score

For instance, if you have a low credit rating, you will be glad to know that this rating can be rebuilt again eventually.

Here are some tips:

• Establish on-time payment history: In this case, arrange with your bank to make regular automatic withdrawals to ensure you are never in a position where you cannot make the necessary payment. Use applications on your phone to alert the need to pay bills earlier than required.
• Pay down high balances: Ideally, it is best to keep balances below 30% of the credit limit to avoid any issues. Paying credit balances reduces credit utilization, which, in turn, improves credit rating if done extensively.
• Fix any reporting errors: If there are inaccurate entries that are detrimental to your score, file credit disputes with the agencies. They are compelled to correct mistakes by erasing the wrong items.
• Limit hard inquiries: Limit the application of new credit accounts as frequent applications lead to multiple hard inquiries. Lenders should compare loans within a short timeframe to avoid multiple inquiries.
• Ask about score improvement advice: It is common to see that many banks and lending companies offer quite distinct credit products targeted to assist the client to rebuild credit score or enhance credit rating.

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!