Many of you want to know what a good credit score is. A credit score is consists of a three-digit number. Generally, they range from 300 to 850. The credit score is calculated from credit reports. A credit report includes your payment history, length of debts, and the amount of debt you have.
So don’t worry, today in this article we will tell you about a good credit score. There are different scoring models to calculate credit scores; some use other data for the same.
Uses of Credit Scores
Lenders and creditors generally use credit scores. These include banks, credit card companies, and car Dealership Companies. However, there is one factor that decided whether to avail of a loan to you or not.
Therefore financial and credit must be different. Unfortunately, there is no magic number that provides you with better loan rates.
Ranges of Credit Scores
Ranges of credit score are mainly depending upon the credit scoring model. Therefore, these are the credit scores that are generally considered.
- Fair: In this, credit score ranges from 580 to 669.
- Good: In this, credit score ranges from 670 to 739.
- Very good: In this, credit score ranges from 740 to 799.
- Excellent: In this, credit score ranges from 800 and above.
Therefore higher credit score means that you have avail responsible credit behavior in your past. That helps you to make more confidence in availing loans from potential lenders. Generally, lenders see who have credit scores above 670 or who lower-risk borrowers are.
Those who have 580 to 669 credit scores are said to be subprime borrowers. It means they will face difficulty for better loans, and those who are under 580 are said to be poor. So they may face a lot of difficulty in getting credit and better loans.
Criteria of Lenders
There is a different type of criteria that lenders follow. While granting credit, your income is considered to be an essential factor. It means credit scores that lenders accept may vary according to their depending criteria.
Three types of credit bureaus are Equifax, Experian, and Trans Union. But that doesn’t mean all lenders follow them. Many of them may report to all. But you must have an account with creditors that report to only one bureau. Along with this, there are different scoring models, and they all differ according to the type of loans and lenders.
Factors affecting Credit Score
- Try to pay your bills regularly and on time: These books do not include only credit cards that have missed payments in your account. It includes late fees of cell phones that are being reported to credit bureaus. So if there is any problem while paying bills then, immediately contact to lender.
- Who must balance a credit card: You have to keep your credit card balance. As if there is a higher balance as compared to the credit limit. As it will impact your credit score.
- Try to pay off all your debts as fast as you can. Since your debts also impact your credit score.
- Verify your credit reports regularly: You have to check your details by requesting a free copy of your credit report. Therefore you are allowed to get your credit report within 12 months. So there is no incomplete information about your account.
Well, you can create your account on my Equifax to get credit reports every tear.
If you find any information incomplete, contact your lender or creditor since all this information is necessary for a good credit score. So from this article now you will get a solution for all your problems regarding credit score.
Also Read: How to Check Your Credit Score?