Good Credit Score
What is a Good Credit Score?
Good credit is valuable. How much credit you have, your credit rating and how you use it can make a major difference in your life. It can affect where you live and even where you work, because your credit record may be considered by prospective employers. That is why you need to understand how credit is awarded or denied and what you can do if you have negative entries in your credit report. Your rights and what you can do if you are treated unfairly.
Is there really anything like a perfect credit score? The answer is yes. Do you need to have a perfect credit score? The answer is no. Although a perfect credit score wouldn't hurt, in most cases, all you need is a good credit score. It's important to mention that lenders usually use a combination of your credit score with other factors when determining your risk and ultimately whether to offer you a loan or not.
Credit score ranges from each of the Credit Bureaus may vary depending on the credit scoring model used. Overall, credit scores of 670 to 739 are generally considered good, 740 to 799 are considered very good, and 800 and up are considered excellent / perfect.
As mentioned, you do not need to have a perfect credit but it helps to know what makes up a perfect credit. Knowing the criteria for a perfect credit will also help you during your credit repair process and ultimately put you on the road to establishing and maintaining a good credit score.
In the US, a consumer with a perfect credit is someone with a FICO Score in the 800 to 850 range. Yes, there are people with credit scores over 800. An estimated 13 percent of the population fall into that category.
Here is what their credit profile looks like.
They have four to six credit card accounts.
They pay off debts as quickly as they can and have had no late payments in the past seven years.
They have at least one installment loan, a mortgage or a car loan, with excellent payment history.
They keep a lower debt to credit ratio. That's the amount of credit they are currently using compared to the total amount available to them.
They have an average of 10 years credit history per account and a few accounts with 20 years of good history.
They have a low number of credit inquiries on their credit report (fewer than three in the past six months).
They have no bankruptcies.
No charge-offs or collections, and
They have debt levels of no more than 35 percent of their overall credit limits per account.
As you can see, having a long history of making all payments on time at all times is the key to a good credit history. However, like we mentioned above, you don't need to have a perfect credit to get a loan or a low interest rate, besides, these are some pretty big shoes to fill.
If you haven't had a long history of making payments on time, and have some negative information on your credit report, don't give up. There are ways to improve your credit score and steps you can take today to put you on the path to good credit. You don't need to hire a credit repair agency or pay a professional. These are all steps you can take on your own and in some cases, these steps can increase your score by 20 points or more in one month.
What is a Bad Credit Score?
Bad credit is any FICO Credit score below 560. Bad credit score is usually a result of:
- Making late payments or missing payments
- Credit cards that are maxed out / exceeding your credit limit
- Applying for too many accounts in a short amount of time
- Home foreclosure
- Filing bankruptcy
|How to order a free credit report||Dealing with Credit Bureaus|
|How to repair bad credit yourself||Profile of a Perfect Credit|
|How to Improve your credit score||Credit & Marriage|
|How to dispute negative credit||Know your legal rights|