Credit scores range from the scale of 300 to 850, and a good credit score is 690 to 710 on a credit scoring system like FICO scores and VantageScores. Generally, a good credit score is between 690 and 719 from the credit score range system. A good credit score, allows you to apply for a loan. But if you have a score that is above 720 this is considered an excellent score. While, if you have a score that is between 630 and 689 is considered a fair score. A score that is below 630 is considered a bad credit range.
FICO and VantageScore is the two most popular credit scoring systems and the credit score range is from 300-850 range. Learn more about the credit score range i.e., a bad, fair, good, and excellent credit score range.
What is a Good FICO Score Range?
If you’re wondering what a good credit score range is, a good FICO score range between 670 and 739 according to the FICO. According to FICO, score that range from 580 to 669 on the score is considered “fair” and if the range between 740 and 799 is considered very good. If the range read above 800 that is an excellent credit score range.
What is a Good VantageScore?
VantageScore is quite similar to FICO. But a good VantageScore credit scores range lies between 661 and 780 in which the company named as “Prime” credit tier. A score above 780 is called “Superprime” on VantageScores. While credit score range that lies between 601 and 660 is considered “near-prime.” A score below 600 on VantageScore is considered “subprime.”
Benefits of Having a Good Credit Score
Having a credit score that is above 670 is very good because this provides you the privilege of a lot of benefits. Your credit score determines whether you’ll be approved to borrow money and also how much you’ll pay as interest. With a good credit score range, you can enjoy:
- Approval to your requested loan.
- Mortgage with suitable interest rate.
- A unsecured credit card that comes with a good interest rate.
A good credit score helps in different ways financially. It always advisable to have a good credit score to be entitled to amazing benefits.
A Good Credit Score According to Lenders
Lenders that include credit card issuers and mortgage providers come with their own standards on what a good credit score range is. This will determine access to loans and also the interest rate. Having a good credit score helps you to get the loan you need or want regardless of the lender.
How Credit Score Ranges Affect Loans
- Risk Assessment: Lenders use your credit score to gauge the risk of lending you money. A higher score signifies lower risk, while a lower score indicates higher risk.
- Loan Approval: A strong credit score significantly increases your chances of loan approval. Conversely, a low score may lead to loan denial.
- Interest Rates: Credit scores directly influence the interest rates lenders offer. Borrowers with excellent credit typically qualify for the lowest interest rates, saving them substantial money over the loan’s life. Those with lower scores face higher interest rates, increasing the overall cost of borrowing.
- Loan Terms: Beyond interest rates, credit scores can affect other loan terms, such as:
- Loan amount: Lenders may offer larger loan amounts to borrowers with high credit scores.
- Repayment terms: Favorable repayment schedules may be offered to those with good credit.
- Types of Loans Available: Some loan products, particularly those with the best terms, are only available to borrowers with strong credit. Individuals with poor credit may be limited to high-risk loans with unfavorable conditions.
General Credit Score Ranges and Their Implications
Excellent (800-850):
- Best interest rates and loan terms.
- High likelihood of loan approval.
Very Good (740-799):
- Very favorable interest rates and loan terms.
- High likelihood of loan approval.
Good (670-739):
- Generally good interest rates and loan terms.
- Likely loan approval.
Fair (580-669):
- Higher interest rates.
- May face stricter lending requirements.
- Loan approval is possible, but less assured.
Poor (300-579):
- Significantly higher interest rates.
- Difficulty securing loans.
- May require collateral or co-signers.
Factors Affecting Credit Score Range
Understanding the factors that affect your credit score is crucial for maintaining good financial health. Here’s a breakdown of the key elements:
- Payment History (Most Important):This reflects your ability to pay bills on time. Late payments, missed payments, and defaults significantly damage your score. Consistent on-time payments are the most effective way to build a strong credit score.
- Amounts Owed (Credit Utilization): This refers to the amount of debt you carry relative to your available credit. High credit utilization (using a large percentage of your available credit) can negatively impact your score. Keeping balances low is essential.
- Length of Credit History: A longer credit history generally results in a higher score. This factor considers the age of your oldest and newest accounts, as well as the average age of all your accounts.
- Credit Mix (Types of Credit): Having a variety of credit accounts (e.g., credit cards, installment loans, mortgages) can positively influence your score. This demonstrates your ability to manage different types of credit responsibly.
- New Credit: Opening multiple new credit accounts in a short period can lower your score. Hard inquiries (when lenders check your credit report) can also have a temporary negative impact.
How to Improve Credit Score
If you’re wondering how can I improve my credit score or how to get a good credit score. Having a bad credit score need improvement, there is various practices in which you can follow to build your score. Here is the following:
- The you need to be quick when paying your bills, meaning you need to pay your bills on time.
- You need to ensure that you keep your credit card balance below your credit limit. Meaning that your credit card balance must not be above your credit limit.
- Also, you need to ensure that your credit accounts is open only if there is a reasonable reason that includes high fees or poor service to close them.
In addition, you need to avoid the last payment or credit application is a short time period. This is because it might cause a drop-down on your score. You can research more on how you can improve or build your credit scores to the perfect credit score range.
Credit Score Monitoring and Tools
Credit score monitoring and the tools associated with it are essential for maintaining financial health.
Why Credit Score Monitoring Is Important:
- Fraud Detection: Monitoring helps you identify unauthorized activity, such as new accounts opened in your name, which could indicate identity theft.
- Error Detection: Credit reports can contain errors. Monitoring allows you to catch and correct inaccuracies that could negatively impact your score.
- Tracking Progress: Regular monitoring enables you to see how your financial habits affect your credit score over time.
- Peace of Mind: Knowing that your credit is being monitored can provide a sense of security.
Types of Credit Monitoring Tools:
- Credit Bureau Services: Companies like Experian, Equifax, and TransUnion offer their own monitoring services, often with varying levels of features and costs.
- Third-Party Services: Many companies provide credit monitoring as part of broader identity protection services. These often include features like dark web monitoring and identity theft insurance. Examples include Credit Karma, Aura, and Identity Guard.
- Financial Institution Tools: Some banks and credit card issuers provide free credit score monitoring to their customers.
Features to Look For:
- Frequency of Updates: How often is your credit score and report updated? Daily or monthly updates are ideal.
- Number of Bureaus Monitored: Does the service monitor all three major credit bureaus (Experian, Equifax, and TransUnion)?
- Alerts: What types of alerts are provided? Look for alerts about new accounts, inquiries, and changes to your personal information.
- Identity Theft Protection: Does the service offer identity theft insurance or assistance with fraud resolution?
- Ease of Use: Is the service user-friendly and easy to navigate?
- Cost: Consider the cost of the service and whether it fits your budget. Some services offer free basic monitoring, while others charge a monthly fee.
Popular Tools:
- Credit Karma: Offers free credit score and report monitoring from Equifax and TransUnion.
- Experian: Provides both free and paid credit monitoring services, including access to your FICO score.
- MyFICO: Specializes in providing FICO scores and in-depth credit information.
- Aura: Provides comprehensive identity theft protection, and credit monitoring from all three bureaus.
FAQ’s:
What is a good credit score range?
A good credit score range is generally considered to be 670-739. Very good is 740-799, and exceptional is 800-850.
How often should I check my credit score?
It’s recommended to check your credit score and reports at least once a year. You can also monitor your score more frequently through various online services.
Can I get a loan with a poor credit score?
It’s possible, but you’ll likely face higher interest rates and stricter loan terms. You may also need a co-signer.
How long does it take to improve my credit score?
It varies depending on the factors affecting your score. Consistent responsible financial behavior will improve your score over time. Some negative items can take 7-10 years to fall off of your credit report.
Paying down credit utilization can show results within a month or two.
Will checking my credit score hurt it?
Checking your own credit score (a “soft inquiry”) will not hurt your score. Only “hard inquiries,” such as when you apply for a loan or credit card, can temporarily lower your score.
What is the difference between a credit score and a credit report?
A credit score is a three-digit number that summarizes your creditworthiness. A credit report is a detailed history of your credit activity, including your payment history, credit accounts, and inquiries.
Where can I get my credit score?
You can get your credit score from various sources, including:
- AnnualCreditReport.com (for free credit reports)
- Credit card companies
- Financial institutions
- Credit monitoring services