Having a good credit score is essential for many financial goals. It can help you qualify for mortgages, car loans, and the best credit cards. It can also help you get better-than-average APRs from lenders and increase the odds of credit approval. But what is a good credit score?FICO, the most widely used credit rating system, uses a range of 300 to 850.
Generally, a score of 700 or higher is considered good, while 800 or higher is considered excellent. Most consumers have credit scores between 600 and 750. According to FICO's website, scores between 580 and 669 are considered fair, while scores between 740 and 799 are considered very good. Anything above 800 is considered exceptional. VantageScore, another popular credit rating system, also uses the 300-850 range.
The higher your score on the VantageScore scale, the lower the risk it poses to lenders. Having a good credit score can help you qualify for more financial products with better rates, terms and credit limits. It can also help you get approved for attractive rates and terms when you apply for a loan. But how do you get a good credit score?One way to start building your credit is to open a secured credit card, student credit card, credit building loan, or student loan.
You should also avoid late payments and keep your credit card balances low. This will help you maintain a good credit score. Closed and canceled accounts will remain on your credit reports and may continue to affect your ratings until they decline. Credit checks for the purpose of making credit decisions can cause a small temporary drop in your rating, and several in a short time can add up. If you have bad or fair credit, there are products available to help you rebuild your score. You should also check out Select's best credit cards for good credit.
These cards require at least a good credit score and offer competitive rewards, annual statement credits, balance transfers and more. Finally, make sure to check your score for free. This will help you stay on top of your finances and make sure that your score is in the good range.
