Your credit score is a three-digit number that tells creditors and lenders how likely you are to default on your bills or your risk of repaying them on your credit card or loan payments. The FICO Score, one of the most commonly used credit scores, ranges from 300 to 850 to be better with higher credit scores. While other types of credit scores can range, higher credit scores are always better than lower ones.
What is a good credit score?
No matter whether you have a good credit score depends on who is checking your credit score and the criteria it measures you through. Generally, a good credit score – on the FICO scale – is over 720, but for some creditors and lenders the limit can 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 have paid your bills in the past. If you have paid your bills on time and have created credit for the past few years, you will probably get a good credit score.
Approved getting started with a good credit score
With a good credit score, you usually have your applications approved and get a good interest rate. Be aware that even with good credit, credit card and loan approval is not guaranteed because creditors and lenders take other factors into account in addition to your credit score. Your income, employment, and amount of debt are some things that creditors and lenders typically look at and can be lacking in any of these areas, leading you to deny it. 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 necessarily mean that your applications are denied. But if you are approved, you will likely get a higher interest rate. Or, if you apply for utilities or other monthly services, you may need to pay a deposit to establish your services. Or the creditor or service provider may need you to have a cosigner before you can be approved.
Do you have a good credit score?
You have credit reports with three different credit bureaus and the information in each credit report can be different. Since your credit score is based on your credit report data, your results can vary slightly. It is possible to have a good credit score with a credit bureau and fair credit scores with the other offices. This can happen if you have a debt collection or other negative account that appears on one credit report but not on the other.
Once you order your 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 learn which factors contribute to your credit score. If you don’t have a good credit score, check your credit report to learn more about the accounts that violate your credit. Don’t worry, you can usually improve your credit score by reducing high balances, paying overdue accounts and building a positive payment history.
If mistakes contribute to an unsightly credit score, you can dispute them with the credit bureau. A better credit score won’t happen overnight, but with the time and the right actions, you will see your credit score increase.