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Also, pay attention to the information provided because some may be outdated or just incorrect and a mistake is pretty common due to the fact that employers have to spend hours checking these files and they might miss some things.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