What Is Very Good Credit Score?

This paper looks at A Very Good Credit Score and why it Matters.

It is also important that you know your credit score is among the most vital numbers that define your financial status. It essentially alters your capability to borrow money and debts for essential purchases such as a home or a car and also it quantifies the interest rates you will pay. Well, to answer the main question of what makes for a very good credit score that will help one secure the best loan terms, we need to look at some specific features of credit score.

The good or bad credit score is another way of asking for the baseline or standard credit score.

These scale from 300 to 850. It is widely considered that FICO, one of the most popular credit scoring services, sets the bar for good credit scores at 670 and above. By the FICO scale, the desirable credit score to be considered very good starts from 740 or even higher. The higher the number of the score, the better interest rates and other conditions of loans that one will be eligible for.

A credit score of 740 to 799 tends to be sufficient to get you the prime rate and other attractive deals. Any number above 800 is considered excellent, but you can hardly get any better rates when you score 740 and above. However, the score of more than 800 points testifies to the favorable credit behavior over a certain period.

As much as credit scores are used in everyday life, few people understand how they are arrived at, here’s how credit scores are calculated.

A specific equation that is used in the computation of credit scores is secret to every company that provides the scores. Still, FICO and VantageScore, two of the most utilized models, give basic explanations of what influences your score.

Major elements include:

• Credit history – Some of the factors include; Using a checking account or credit card – If one pays the dues in. This is usually the largest element that ranges from 30 percent to a FICO score.
• Credit utilization – It is the prominence of the debt about the credit limits available, or how frequently credit is utilized. This translates to 30% of a FICO score. It is important to control the level of utilization and keep it below 30% according to the opinion of experts.
• Credit utilization – The amount of funds that you currently owe to the credit companies and the percentage of your available credit that you are currently using. Overall, the longer the amount of credit history on record, the better. This is as important as 15% of a FICO score, depending on its quality.
• Credit usage frequency – The rate at which you apply for new credit accounts or open new lines of credit. It was also observed that the inclusion of too many new accounts can lead to temporary deterioration of scores. This determines the creditworthiness of the borrower to the tune of 10% of a FICO score.
• Credit type – If you have had previous credit experience in using different credit such as credit cards which is revolving credit and installment credit such as mortgage or car loans. This component contributes to a FICO score by accounting for the last 10 percent of it.

A score of 740 and above is considered to be an excellent credit score as it shows that you do not have a blotchy record on any of the five major factors that are used to determine creditworthiness; you are regular in paying your bills, do not have a high balance of credit utilization, do not have a short credit history, irregular credit accounts and you have had credit accounts for many years.

Advantages of having a Very Good 740+ Credit Score

Achieving a credit score of 740 or higher unlocks the most favorable loan terms and financial opportunities, including:

• Lower interest on mortgages - For every 20 points of credit scores, one can shave about 0. 125 percentage points on the interest rates for mortgages. Speaking of a home loan of 30 years, that can save tens of thousands of interest.
• Higher chances of approval – The credit standards have become even stricter compared to the time of the Great Recession. Any score of 740 or higher puts you in the strongest position for being approved for the best rewards credit cards, personal loans, car rentals, insurance plans, and everything else.
• Use of credit – Bad credit leaves you vulnerable to high interest rates whenever you borrow money or use credit in any form, such as a mortgage, auto loan, personal loan, or credit card. It is easier to have less interest expenses and thereby experience major savings in the long run.
• Higher credit limits – since a very good score is an indicator that one is proficient in managing the credit received, the credit limit amount is likely to be higher. In addition, it serves to reduce your overall credit utilization for even the highest credit scores.

In other words, within the range of credit scores 740+, there is maneuverability in the choice of the interest rate and other conditions that correspond to the credit reliability of a potential borrower and a low risk of non-payment.

Paying Your Credit Card Balance to Achieve a Credit Score above 740

If you don't have very good credit yet, take the following steps to build and raise your score:

• Credit reporting – Another way to identify the factors that are reducing your credit score is to go through the credit reports from famous credit bureaus including Experian, Equifax, and TransUnion. It turns out that getting mistakes corrected can give you a rather pleasant and fairly immediate bounce.
• Higher balances – High balances are bad for scoring for example when one has high balances on credit cards. Reduce balances to below thirty percent of your credit available credit limits. Larger firms can pay cash for most of their supplies if they can do so.
• Important bills – make sure to always pay your bills on time as missed payments can significantly reduce the scores. Keep all debts current. If you have problems with paying your bills, try to call the creditor to check if there is any possibility of lowering payments or entering a hardship program.
• Avoid hard inquiries – Every time you apply for credit, this will reflect as a hard inquiry on your report; thus, apply for credit only when necessary. This means that when there are many hard inquiries done in a short period, it means the credit risk of the borrower is high.
• Do not close old accounts - The age of accounts contributes to 15% of your score; therefore, avoid closing your oldest credit accounts. It is also important to have long-term credit to create a stable credit history.

And it is with very good credit – often with a credit score of 740 and above – that one gets the nod of lenders to access their premier products with utmost ease. It gives to some extent, the advantages of saving and the convenience needed in the process of other large-scale significant events in one's life.

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!