A good credit score cannot be determined using a simple definition. There are many reasons to be considered to see if a credit score is good. There are different scoring models offering credit scores with various score ranges. Apart from this, lenders keep their standards for rating credit score. Studies say that scores ranging on a scale of 300 to 900 from high 650s and up to the mid-749s are good.
How a Good Credit Score Can Help You
It is the information as per your credit reports that how you have to pay the debt to your lender also tells you the risk level at which you exist as a borrower. A good Credit score allows you to get a variety of loans and gives you loans at lower interest rates and fees. It means the higher the credit score the higher the chances to get loans approved with favorable terms and conditions. As the higher credit score offers you low loan interest it's like a lifesaver on the loan life.
Similarly having a good credit score alone will approve to get the credit card, many other terms are considered by the lender. So, before applying for a credit card understand the terms and conditions about the credit score.
Credit score ranges
Depending upon the credit card usage credit scores will be calculated. There are different credit score models and each model uses a unique formula to calculate the score. The best-known credit scoring companies CBIL and Experian Score also have multiple credit-scoring models, which produce different scores. Though there are many models for credit scoring, they have common scale ranges from 300 to 900. The score within this scale range helps you interpret the score mean you have retrieved.
Different credit score ranges
Poor Credit Score: 300 to 549s
- A poor credit score is not a financial dead end.
- But it makes you get the loan approved.
- You can build your credit score with some financial products like secured credit cards. (Terms apply)
- But potential fees and higher interest rates apply over the credit-building product, so, be aware of it.
- Make sure that the lender reports the 4 major consumer credit bureaus (Equifax, Experian, TransUnion (CBIL), and Highmark).
- This will help you score during your payments.
Fair or good credit scores
- Fair credit score ranges the scale - 550 to 649
- Good credit score ranges the scale - 650 to 749
- Whenever you compare various options for applying for a new loan, it results in a hard inquiry. It impacts negatively on your scores.
- Loans with preapproval and prequalification options give you an idea of the terms and conditions that you might have to qualify ahead.
- Also, many credit card approval Odds will help you decide whether the credit applying is worth it or not.
Excellent or Very Good Credit Scores
- An excellent credit score is above 750.
- Excellent credit score - loans, credit cards with low-interest rates, good repayment terms will be approved.
- But having a good credit score does not mean you are eligible for every loan.
- The lender could deny your application as many terms apply over loan approval, example your loan approval may be rejected based on high debt to income * * ratio, etc.
- It's always recommended to keep an eye on your credit report.
- Check over the websites that help you get access to free credit scores and free credit card reports, this will help you to stay on top of your credit.
What is the highest credit score one can get?
- Generally, the higher credit score one can get is 900.
Note: There are many different credit scores with different ranges.
How good should my credit score be
To buy a house
- Credit requirement varies from state to city.
- Check your credit score you may need before after awareness goes ahead to purchase the house at your willing state or cit.
To rent an apartment
- Landlords run a particular credit check, before the tenant sign a lease.
- It depends on how the landlords run the credit check, the location of the apartment, etc.
To get approved for a credit card.
- You can get suitable cards when you are aware of your credit score level you will fall.
- For no credits - Go for secured cards or cards for beginners
- For poor credits - Go For secured cards or rebuilding credits
To get approved for a car loan.
- Car loans will be usually approved even with a poor credit score.
- But there is a risk of high-interest rates
- But, if you still want to go for a car loan, then pay a higher down payment so that you could get the loan at the minimum interest rates.
FAQs
How do I get a good credit score?
- Check your credit report
- Pay interest on time
- Keep longer credit history reports.
How long does it take to achieve a good credit score?
- It all depends on you, the way you start from, and how challenges you face.
How can you find out what is your credit score?
- You can check on various websites example Equifax and TransUnion.
- Checking your credit score does not hurt your credit helps you build up your score.