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What is a Good Credit Score?
Most people know what a credit score is, but not really what it means or is all about. What qualifies as a good credit score? Some people consider a good credit score to be 720+, but this is classified as above average credit, or “very good credit”. Most people do not have a credit score that is this high, but with some time and some effort, you can achieve a higher credit score.
So what does a good credit score mean for you?
Good credit can get you lower percentage rates on your purchases and loans, and bonuses like miles and gifts. You can get department store credit cards, and you can get better loans. People with good credit can buy cars and homes with the financing that they need. If your credit score is not high enough, then you will either be denied outright for these types of financing and lending, or you will be forced to accept much higher interest rates, which really isn’t fair but is unfortunately up to the lender to decide.
When you have a good credit score, you can get approved for any type of financing that you need. Most credit scores reach as high as 850, and with a credit score this high, no one is going to have an issue lending to you. However, what is considered good credit is different to everyone, and some lenders are perfectly satisfied with lower credit scores as long as your credit report does not show anything really terrible. What some people may consider to be “so so” credit may actually be decent credit to a lender when it comes to getting a car loan or a home repair loan.
Generally speaking, a credit score below 600 is considered to be poor, and anything between 600 and 700 is continued good or fair. Having a good credit score is important, because it allows you to get the financing that you need, no matter what it is that you need it for. Because you never know when you are going to need money fast, having a good credit score is vital. If you suddenly have medical bills to contend with or an issue with your vehicle that needs to be repaired, then you need to be able to get a loan or a line of credit fast, which is much easier when you have a good credit score. Having a good credit score is a good way to make sure that you can get the lending you require whenever you require is, so start building a healthy credit report and score now, and take advantage of the results over time and you will surely be glad that you put effort into keeping your credit score high and your credit report in good standing with all three credit bureaus.
Credit Karma provides free credit scores along with national averages. Read more about what is a good credit score on Credit Karma.
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A good credit score is vital in obtaining a mortgage these days. However, I have found that first-time buyers can have a lower score and still get a great rate on a mortgage. This is fantastic for first-time buyers because they can get more home for their money.
Also, if you haven’t checked your credit report (from all 3 agencies) then you may want to do so just to see if there are any errors that you can correct. That will also provide a spike in your credit score if you can get any of those negative erroneous items erased.
I guess it’s all subjective. What was a good score a year ago will get you nothing now.
A credit score has a wide scope today and people often forget about its implications in background checks and its use in figuring insurance premiums.
Credit scores touch our lives in so many ways. Employers, lenders, insurance companies, and cell phone companies all use them. This is a reality.
But let’s look back at life before credit scoring. People were judged on their race, their gender or their neighborhood residence.
When I took my first training class on credit scoring, one exercise the instructor did was to make us read credit reports and make lending decisions without a score. This led to “under lending” in most cases. Plus, it took longer so some applications were never read. That led to more under lending. A credit score isn’t perfect but it has made more lives better and right or wrong…credit scores are a reality.
You know, I deal with credit troubles everyday with my job as a housing consultant. I see so many more bad credit scores than good credit scores. People need to understand that with a little time and work, they can get themselves back into a position to buy right.
If people would just take the time to understand how credit works and how to manage it, they could help themselves out so much. The difference in rates and types of loans and programs available could be the difference of being in their dream home or settling for just enough to make it by.
Understanding your personal credit and general credit knowledge should be taught in a high school finance class.
Today esp. with our economy our credit scoreis vital to our lives. People also need to be aware of the things that causes negatives on our reports. Something so simple as making a late payment or consulting with a credit consolidator it all brings our credit score down…
620 is generally the cutoff for prime rates
You are right. 720+ credit score is a very good credit score but if anyone have a credit score of above 680 then he will get approve for a loan with affordable rates and terms.