What is a Good Credit Score to Have?

Meta Description: The answer to what is a good credit score is pretty simple. Find out today what you can do to change your life!

If you've ever asked yourself what is a good credit score and never got the answer, you can relax, because over thousands of Americans have the exact same problem when in reality, the answer to this problem can be just a number, or maybe a little more complicated.

There are many types of tests that lenders use in order to give you a score but we're going to research the most common one, the FICO, or the Fair Isaac Credit Score Scale. 

However, when did this madness with credit scores begin? Well, partly because of the heavy advertising on the TV and partly because people learnt about this term from magazines, most individuals worldwide want to find out more about what a good credit score is. 

Not long ago, just a few years, only bankers and lenders were familiar with this term, but nowadays more and more ordinary people know a lot about good credits. 

To start with, there are three big credit bureaus in America, Equifax, TransUnion and Experian. All of these use different scoring methods and give each individual a credit report. Although the results might vary, the differences won't be big and they will other reflect one of three things: the customer is awesome, the customer is mediocre and the customer doesn't pay his/her debts.

The FICO scale ranges from 350 to 850. A good credit score for this kind of scale will be anywhere above 760. That sounds pretty high and pretty hard to achieve, but through hard work and attention you are destined to success. A person with this score will be eligible for the lowest interest rates as well as the lowest monthly payments possible. 

There are many factors that determine your credit score but I'm not going to make you understand all that information now, take things step by step. 
The credit score is determined by your credit's report made by either of the three bureaus. After your lender has read it and decided upon your score, he can say whether you're worthy for a loan or not. 

Remember, scores below 650 are considered risks and banks, as well as different lenders don't take any kind of risks, as small as they can be because they can't afford to lose money. 

Begin the process of learning what a good credit score is and how to fix it (if needed) or maintain it high and to do so, you can go ahead and read our other articles. 

Also, pay attention to the information provided because some may be outdated or just incorrect and a mistake is pretty common due to the fact that employers have to spend hours checking these files and they might miss some things. Point is, always check your credit reports.

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What is a Good Credit Score?

Meta description: Is your credit score good enough to keep asking for loans? Find out now!

Nowadays, it's so hard to qualify for a loan. There are several requirements that you have to meet in order to be able to ask for yet another loan. What's more, the majority of people have no clue what a good credit score is. Most of them didn't even know the fact that a credit score exists.

In any case, this is your chance to learn. A credit score is ranged between 300 and 850 and is calculated on several factors. If you have 850 on your credit score you will be able to ask for any loans, anytime and get them on the spot because it means you are the perfect client. 

However, as that is very hard to achieve and we are all humans and make mistakes, a good score starts from 670. Scores that are lower than that will probably have a hard time getting loans.

There are five crucial factors which determine your credit score and they are pretty simple to follow, actually. Read these points carefully so you can have a broad idea of what is good credit score looks like.

1. Payment History (35% of your credit score)

This is one of the most important factors. Do you pay your bills on time? It's crucial that you do because if you didn't pay all of your credits on time, you'd have to pay them timely for the next two years in order to have the perfect score. 

Did you know that missing a payment by 30-days can reduce your credit score by 20 points? That's extremely significant if you are looking to make constant loans.

Try not to overextend yourself and say things like "I can pay that tomorrow" because each passing day of lateness are more points deducted from your credit score.

2. Amount Owned (30% of your credit score)

This is basically calculating your credit balance against your high credit limit. For example, if you have a $5,000 credit limit, if you keep your debt below $500 you will be in the 10% range of available credit, which really is great.

Going with the same example of $5,000, you can go ahead and divide it by 10. You'd usually want to pay your balance below this price, in this case, less than $500. 

3. Length of Credit Accounts (15% of your score)

The title speaks for itself. The older your credit account is, the better. Our advice is that you keep your credit cards opened, even if you don't use them anymore, but don't forget to use them at least once every six months.

Remember, credit accounts with 15-20 year history are more powerful than newly opened accounts.

4. Amount of New Credit Accounts (10% of your score)

Don't buy too many credit cards at a time because that might raise suspicions for the bank. Try to go with a small line of credit cards and just build from there. Don't buy, for example, ten credit cards a time.

5. Type of Credit Used (10% of your score)

It's to your advantage if you have more credit cards of different types because they will add to your score!

This is exactly how your credit score is calculated and remember, a good credit score is between 670 to 850!

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Why It Is Important To Know How Good Your Credit Score Is?

There are a lot of factors that determine your credit score. Your credit score is incredibly important in regards with your loans. To have a better understanding, if you have an amazing credit score, you will be able to loan more money much faster. However, what is a good credit score and how is it calculated?

Well, a credit score is generally split in 3 categories:

- A High Credit Score

- A Middle Credit Score

- A Low Credit Score

Let's take it from the bottom to the top. So, if your credit score is low, it is pretty clear that loaners will be incredibly cautious when lending money and that you won't be able to loan as much as you'd want. Or, if you're unlucky or if your score is way too low, you may not even be allowed to take any sort of loan, no matter to which bank you're going to.

If your credit score is middle, you're together with the majority of the people that usually don't ask for a lot of loans but are faithful clients that always pay their debts. Therefore, you will be able to ask for loans that are even average-high.

Credit scores are composed of a varying degree of numbers, anywhere from 300-850. A score is comprised of a scope of variables. A quick look at the payment history consists of thirty-five percent of the score. Watching the sum a person owes is thirty percent. The credit history longevity is fifteen percent of the score. New spending information makes ten percent. Consideration of the different sorts of credit utilized is the remaining ten percent of the score number.

Amazing credit is a score of 760 or above. Very good credit is a notch beneath 700 to 759 score. A good score falls in the scope of 680-699. An alright score is 620-679. A fair or so-so number is summed up in the 580-619 section. On the off chance that a score lies in the 300-579 area, the score is considered poor.

It is significant to the one needing credit to study their report thoroughly six to twelve months before applying for a major loan. In checking the report and seeing the score, you can search for any errors and ensure points of interest are listed correctly. This time frame permits a credit seeker the chance to begin a process of making corrections where required if errors were found. In the event that errors still show on the report when applying for a large loan, you must tell the bank of these mistakes.

There is also the chance to increase one's credit score. This should be possible in making sure that monies owed are routinely paid and decreasing extraordinary account balances. Since timeliness of payment is noted on every report, it is imperative to make payments on time. It would be in the borrower's best enthusiasm to not take on new debt.

So basically if you have an alright score or above, you're almost guaranteed to have good deals and be able to make as many loans as you may wish to, no matter the price you're asking for.

Therefore, always be careful of your credit score before asking for a loan, as you may get turned out very fast and the bank will surely remember you. That's why, you have to thoroughly study your bank credit score as good as you can and try to repair it, if needed.

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Reasons Not To Pay Taxes With A Credit Card

Everybody must pay taxes to the IRS at the end of the year; unless of course you can prove that you never received any income during that period. Even though paying taxes is a duty for all citizens, there are times when this liability will come knocking when you are not financially prepared. If your returns indicate that you owe money to the government in form of taxes, you must meet this obligation otherwise you may face legal action and in addition, ruin your good credit. When you have maintained a good credit history for a while, your credit card company might increase your limit and this means you can use the card for almost all expenses including paying the taxman. Before you use your credit card to pay tax and ruin what is a good credit rating score, think about;

The money that tax payment processors will deduct from your card to pay themselves is an expense to you. The IRS appoints collectors to act as contact points for people wishing to pay tax through digital means and these appointees are paid by the tax payer. This fee will be deducted from the credit card limit and hence increase the utilization.

You want to be in the good side of the law by paying your taxes promptly but if you use a credit card, it is easy to underpay. Did you know that an underpayment of your taxes accrues interest charged at different rates every quarter? You may be trying to save face by paying your taxes with a convenient credit card to get good credit but what is a good credit rating score can only be achieved by avoiding it completely.

Related Source: Why Paying College Tuition With A Credit Card Is Unwise

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Redeeming Your Credit Score with a Secured Credit Card

There are various reasons that could lead one to have a bad credit rating. If you find yourself struggling to bounce back to what is a good credit rating, there is hope for you. Repairing bad credit can take time and while it does not move you from bad to good in an instant, the progress could place you in good light with lenders. One of the most common strategies that people use to successfully go back to what is a good credit rating is finding the best credit card for good credit. A secured credit card is an excellent tool when you want to rebuild your credit reputation.

This is the best credit card for good credit and is what is commonly referred to as pre-paid credit card. As the borrower, you are supposed to pay upfront the amount of credit limit you wish your card to have. The amount of credit is usually in the range of $300-500 and acts as collateral for the amount of money used from the card. The lender will begin with this low range but as you honor your payments, they will be willing to increase this limit. To maintain a good report is as simple as making payments on time and paying the full amount due for repayment.

As the best credit card for good credit is used, the corresponding payments are recorded with credit bureaus and keeping this up for a while results in what is a good credit rating. The score may take a while to come up, but lenders now have a basis for extending credit facilities. To build your credit while at the same time save money, find the best credit card for good credit that offers low cost of annual fee and do not have an application fee at registration.

Related Source: Getting Your Footing in a Credit Economy

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What is a good credit rating score?

Having good credit is a concept that many understand. Much like having good health or savings in the bank, it is something that all working adults would like to regain, maintain or obtain. But what is a good credit rating score?

Generally speaking, a good credit score includes any score above 700 points, however, since everyone has personal opinions about what constitutes a good credit score, it is essential to conduct your research first because different lenders have different criteria to determine whether an individual has good credit scores or not. Banks typically use credit scores to help them determine if they will approve you for a loan or credit card. Basically, the higher your credit score is, the greater your chance of getting approval.

The best way to determine if you have good credit scores is by breaking your scores down into ranges. The most widely used model for determining credit score ranges is the FICO credit scale that goes from 300 to 850, with anything above 850 reflecting excellent credit scores. To get a score of 800 and higher, one must have excellent financial management skills, a long credit history that is devoid of late payments and any other negative remarks, a stable and long history of employment and multiple credit lines. With these terms, anyone with a good credit score is eligible to receive approval from a lender as well as enjoy the benefits of low rates and favorable repayment terms. For the most part, anyone with a score of between 700 and 749 is considered to have a good credit rating, and they will most probably get approved for a loan, but they will not receive the VIP treatment experienced by individuals with excellent scores.

Lenders have their own criteria and in most cases, having a good credit score is only one element of borrowing money. A credit range serves as a fast reference for lenders so focusing on the range of your scores will help you work towards improving your credit scores.

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