What is a good credit score?

For most lenders, good credit means having a credit score that falls into the “good” or “excellent” range.

According to TransUnion’s industry analysis, “A ‘good’ FICO® Score falls between 670 and 739.” U.S. consumers with credit scores of 800 or more – considered by some as “superprime” – account for 8% of all open accounts but rack up 30% of the available credit, according to Experian.

The average credit score in America is about 699 out of 850 points on the three major credit bureaus: Equifax, Experian and TransUnion. Anything above 700 is generally considered a very good credit score.

There are several different types of FICO scores that lenders use to assess your financial history, but the most widely used is the classic or generic FICO® Score 8 model, often simply called a “FICO” score. According to Fair Isaac Corporation (FICO), the developer of this popular scoring formula, consumers with scores of 700 and above have excellent credit standing. Individuals with scores below 580 are considered very poor risks for lenders because they pose an extremely high level of risk. It’s important to remember that FICO® Scores are not always consistent from one lender to another since each loan type will have its own unique criteria for acceptance, based on their perception of your specific level of risk as well as other factors.

What Do Credit Scores Mean?

Credit scores range from 300 to 850, and a good credit score for a consumer loan is typically considered to be a FICO® Score of 620 or higher. If you have a “good” credit score, this means your repayment history has been favorable and usually on time. It also means you have worked hard at managing your existing debts responsibly while simultaneously building up a healthy level of available credit. Such characteristics are encouraging signs that you will likely repay any future loan on time as well, which makes lenders willing to approve additional credit when requested.

In other words, having good credit implies that the borrower is more trustworthy regarding being able to repay future loans because they have already proven themselves responsible in repaying (or not defaulting) on past debts.

To sum it up, a good credit score is generally considered to be anything above 700 on the classic FICO® Score scale (although different lenders may have their own definitions). This indicates that you have a history of responsible borrowing and repayment, as well as a healthy level of available credit. Maintaining a good credit score is important because it can help you secure lower interest rates on everything from car loans to mortgages. It can also save you money in the long run by helping you avoid costly fees and penalties. So be sure to keep track of your credit score and work hard at maintaining a high rating!

If you are looking to improve your credit score, there are several things you can do. One of the most important is to make sure you are paying your bills on time, every time. You should also avoid maxing out your credit cards and keep your credit utilization ratio (the amount of credit you’re using compared to the total amount of credit available to you) below 30%. Additionally, try to establish a solid history of borrowing and repaying loans responsibly. If you can do all these things, your credit score is likely to improve over time.

Do Lenders Prefer a Good VantageScore Score Over a Good FICO Credit Score?

Different lenders may employ different credit scoring models, and as such may look more favorably on a good VantageScore over a good FICO score. However, the general consensus is that both types of credit scores equally matter when applying for loans or lines of credit with most lenders. The bottom line: having one type of credit score over another will not necessarily determine whether a loan application will be approved.

What’s Better – Good VantageScore or Good FICO Credit Score?

While there are many different factors to consider, typically the answer is “both” – it depends largely on which lender you’re going through and what their requirements are for borrowers with good credit scores. In general, though, your best bet is to have both good VantageScore and good FICO credit scores before applying for a loan or line of credit.

What’s a Good Credit Score – Is 720 a Good Credit Score?

A good credit score is generally considered to be anything above 700 on the classic FICO® Score scale (although different lenders may have their own definitions). As such, if your score dips below that number, it might be time to take steps toward improving your standing by making an effort to pay bills on time every time, keeping your overall amount of debt low in relation to your total available credit, etc.

Does Having an Excellent VantageScore of 760 Mean I Have Good Credit?

Yes! Your excellent VantageScore of 760 means you are very likely to be approved for any loan or line of credit you may apply for. 760 is considered an excellent credit score, and as such most lenders will be very happy to do business with you!

What Makes a Good Credit Score?

The same primaary considerations go into calculating VantageScore credit scores and FICO credit scores:

Payment History

Your payment history is the single most important factor in determining your credit score. It’s also the simplest to understand, since it boils down simply to whether or not you pay your bills on time.

Credit Utilization

The second-most important factor when calculating your credit score is how much of your available credit you are using at any given time. This is measured by your credit utilization ratio, which is the total amount of credit you’re using compared to the total amount of credit available to you. Credit utilization ratios below 30% are generally considered good, while those above 30% are seen as a sign that you’re overextended financially.

Credit Age

The length of time you’ve had your accounts open and in good standing is also a factor when calculating both VantageScores and classic FICO scores. Lenders like to see that you have a solid history of borrowing money and repaying it, which means that opening or closing accounts will impact your score – sometimes drastically.

Mix of Accounts

Finally, lenders like to see that you have a healthy mix of different types of accounts, including credit cards, installment loans (e.g., car or student loan), and revolving credit (e.g., department store credit card). You need at least one account from each category in order to establish good history with creditors.

New Credit Inquiries

When you apply for a loan or line of credit, the lender will pull your credit report to get a sense of how risky it would be to extend you credit. Each time this happens, it results in a “hard inquiry” on your credit report, which temporarily dings your score by a few points. Applying for too many loans in a short period of time can be a sign that you’re in financial trouble, so try to space out your applications if possible.

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