|WHAT IS A GOOD CREDIT SCORE?|
|Posted on: Mar. 19, 2017 in Credit, Credit Score, Debt|
Credit scores seem to come up in conversation a lot more lately. Whether it’s because someone is buying a home, getting a new car, cleaning up their debt, or just planning for the future, their credit score is important. Whatever your credit score is, it’s going to play a role in much of your daily life because it can mean the difference between getting the loan you need or not, and how good of a deal you get on it.
But what exactly is a good credit score? How do you get one and keep it?
The most popular credit score you’ll hear about is the FICO score. FICO and most of the other scores, give scores that range between 300 and 850. The higher the score, the better your credit, and the better treatment you’ll get when applying for loans or credit cards. But where you fall in that range is also important. Here are the typical five levels:
Each lender will set their own criteria for loans, so it’s possible someone with Fair or Good credit might be able to get a loan at one establishment and not another. Also, a lender might approve anyone over a certain score, but may change those with lower scores a higher interest rate. Having a general idea of what your score is will be helpful to give you a realistic idea of what to expect when you apply for a loan.
Credit scores are based on five main areas of your credit history: payment history (35%), credit utilization (30%), length of credit history (15%), mix of accounts (10%), and new credit inquiries. Paying bills on time, not using too much credit (aim for less than 30% of what’s available), having a mix of revolving credit like credit cards and installment loans like car payments, and keep accounts open for a long time without opening and shutting a bunch of new ones will all help keep your score high. The longer you maintain these good habits, the better your score will be.
If your score is low, you may still be able to obtain credit. There are cards and loan programs out there specifically designed to help someone with bad credit. If you’re ready for a new car but your credit is keeping you from getting approved, CreditYes can help with our bad credit auto loan program! We can match you with a dealership in your area that will be with you ever step of the way. Our service is fast and free. Fill out our secure online application and get behind the wheel of your next car today!