Good Credit Score Range – What is Good and Bad in Your Numbers?
Everybody is seeking the elusive good credit score range when they are considering applying for a new loan or line of credit. With a good credit score, banks and other lending institutions see you as a financially stable customer and someone they can trust to repay their loans. One of the most widely accepted and respected scoring system is FICO (Fair Isaac Corporation).
A Primer On Credit
Credit plays a significant role in our lives and creditworthiness determines whether we will get access to credit at affordable rates or not. The record of making timely payments of bills and installments affects credit report of a person. All such transactions are reported to three main credit bureaus.
You can have a good credit score range if you pay your bills and installments on time, whereas you may have low score if you are always late in your payments. Aside from that, if you make only minimum payment on your credit card, you will have a low credit score.
Each of us is assigned a credit score that ranges between 300 and 850. The FICO credit range categories are:
• 700 to 850 (Very good credit score range)
• 680 to 699 (Good)
• 620 to 679 (Average)
• 580 to 619 (Low)
• 500 to 579 (Poor)
• 300 to 499 (Bad)
If your credit score is between 750-849, it means that you possess an excellent credit score and you will get be easily approved for credit by the lenders at low rate. If you possess a credit score in the range of 625-699, you can easily qualify for a loan, but won’t get a good interest rate. Lastly, if you possess a score below 619, you will have a hard time in accessing credit and if you are successful in getting credit, it will be at high interest rate.
Banks always check your credit score when you apply for mortgage, car loan or credit card. It is best if you keep a copy of your first credit report as it is a solid proof of your credit history.
Tips to improve your credit score
1. Clear your bills on time-You should keep in mind that you won’t be successful in repairing your credit if you continue to delay payments of bills. Though you can delay your bills by few days, but you should never be late by more than 30 days at stretch.
2. Increase Your Credit Limits – You should call credit card companies to raise your credit limit, because with a higher limit, you can immediately lower your balance to a great extent. With lower credit card balance as compared to your credit limit, the better your credit score as credit balances often count for only 30 percent of your credit score.
3. Never Max Out Credit Cards- By maxing out your credit scores, you will immediately lower your credit score. Anytime your balance goes about 50 percent of your credit card limit, your credit scores start sliding rapidly.
4. Spread Your Balances – If your credit card has maxed out, you should transfer its balance to other cards that have been paid off. This would ensure that you don’t get the hit from credit rating agencies for maxing out your credit card as you’ve now spread the high balance over number of cards.
5. Never apply for credit all over- When trying to establish your credit score, you should avoid taking new credit. When you have low credit score and you keep applying for new credit, excessive enquiries on your credit score will bring down your score rapidly.
6. Have Different Types Of Credit – As a part of building a good credit score, you should have a nice mix of credit. You should opt for different credit cards, mortgage, loans, and personal loans in your credit profile than just having any one of these categories.
7. Secured Credit Cards- Secured credit cards can help you a lot in building your credit as they are secured by the money you deposit in your account.
You should check your credit score before applying for a long. There might be few mistakes in your credit report and you should take steps to get them corrected. Aside from credit score, the terms of any loan depend upon various other factors
Work On Your Credit To Make Sure You Fall In The Good Credit Score Range
A good credit score range can make a significant impact on your life. With a good credit score you can get you lower interest rate on your loans that can help you in saving hundreds on dollars every month on interest rates.