Your credit score is a three-digit number that tells creditors and lenders how likely you are to repay your bills or the risk of not paying your credit card or credit card. The FICO score, one of the most commonly used credit scores, ranges from 300 to 850 with higher credit scores. Although other types of credit scores may have different ranges, higher credit scores are always better than lower ones.
What is a Good Credit Score?
Whether you have a good credit score depends on who checks your credit score and the criteria that measures you. In general, a good credit score – on a FICO scale – is above 720, but for some creditors and lenders, the limit may be slightly lower or slightly higher. A good credit score tells lenders that you are likely to pay your bills on time based on how you paid your bills in the past. If you have paid your bills on time and have managed your credit well over the past few years, you are likely to have a good credit score.
Getting with a good credit score
With a good credit score, you will usually have approved applications and get a good interest rate. Keep in mind that even with good credit, credit card and loan approval are not guaranteed as creditors and lenders consider other factors besides your credit score. Your income, employment and debt level are some of the things that creditors and lenders typically consider and lack in any of these areas can cause you to turn them down.
This tells us that a good credit score is not a predictor of your ability to pay, but your likelihood of paying.
If you do not have a good credit score, it does not mean that your applications will be rejected. But if you are approved, you will probably have a higher interest rate. Or, if you sign up for utilities or other monthly services, you may need to pay a security deposit to determine your services.
Or, a creditor or service provider may require you to have a cosigner before being approved.
Do you have a good credit score?
You can check your FICO score, the credit score of most lenders. There are other places to order your credit score, sometimes for free and even to evaluate your FICO score.
You have credit reports with three different credit bureaus and the information in each credit report may be different. Because your credit score is based on your credit report information, your scores can easily vary. It is possible to have a good credit score with one credit bureau and a fair credit score with other bureaus. This can happen if you have a debt collection or other negative account that appears on one credit report but not the rest.
When you order a credit score, most providers will give you an overview of the score, telling you whether your score is bad, fair, good or excellent. You will also find out what factors contribute to your credit score. If you don’t have a good credit score, check out the credit report to find out more about which accounts are hurting your credit card.
Don’t worry, you can usually improve your credit score by lowering your high balance, paying off your outstanding bills, and building a more positive payment history.
If the errors contribute to an unattractive credit score, you can challenge them to the credit bureaus. A better credit score will not happen overnight, but with time and the right procedures, you will see an increase in credit score.