The Making of a “Good” Credit Score
Everyone is acutely aware – some of us more than others – what having bad credit can do to your financial life. From increasing interest rates on loans or credit cards, to upping insurance costs, and even trouble getting a new cell phone contract, the effects are far-reaching. When you’re got a bad credit score, they can seem never-ending. “Make sure you’ve got good credit,” or, “That’s bad for your credit,” are some of the most common pieces of financial advice. But, how good is “good”, and what exactly does it mean to have good credit? We’ll break down that and more in this installment of our 300 Words or Less series!
First and foremost, a credit score can range from 300-850, from worst to best. The federal government does not provide cut and dry classifications for a good or bad credit score. In fact, neither does Transunion, one of the three major credit reporting bureaus, or Equifax. Experian, on the other hand, suggests, “Most credit scores fall between 600 and 750,” and, “A score above 700 usually suggests good credit management”.
Generally speaking, 700 is a good minimum benchmark for determining if you’re appealing to a lender, and are reliable based on credit history. Higher up, around the mid-700’s and 800’s range, getting approved for a loan ought to be no problem. Additionally you’ll likely be eligible for the best available interest rates at that point, from mortgages to credit cards.
Lastly, remember that by law, consumers are granted three free credit reports a year – one from each of the three reporting bureaus. Learn more here about how to get yours!