What’s a good credit score? | Your Financial Life | BMO Harris Bank
What is a Good Credit Score?
Having a good credit score is important for a number of reasons. It can affect your ability to get a loan, your ability to get a credit card, and how much interest you pay for those things. It can even affect the cost of insurance and your job opportunities. So, what is a good credit score?
A good credit score generally falls into the range of 650 to 749 on the FICO® Scale, which is the most commonly used credit scoring system in the United States. Scores above 750 are considered excellent, while scores below 650 are considered poor. It’s important to note that different lenders use different criteria to determine what is considered a good credit score.
A score of 650 to 749 is considered “good” because it suggests that you have a history of making payments on time and managing your debt responsibly. You may be able to qualify for loans and credit cards with better terms and lower interest rates than someone with a lower score.
The FICO® Scale is based on the following five factors:
1. Payment History: This accounts for 35% of your score and takes into account how you’ve handled credit and loan payments in the past. This includes any late payments, collections or bankruptcies.
2. Amounts Owed: This accounts for 30% of your score and looks at the amount of debt you’re carrying, such as credit card balances, mortgage and auto loans.
3. Length of Credit History: This accounts for 15% of your score and looks at how long you’ve had credit accounts.
4. Credit Mix: This accounts for 10% of your score and looks at the types of credit you have, such as installment loans, credit cards and mortgages.
5. New Credit: This accounts for 10% of your score and looks at any recently opened accounts or inquiries for new credit.
If you’re looking to improve your credit score, the best thing to do is to make sure that you’re making all of your payments on time. Paying off your debt is also a good way to improve your score. Additionally, it’s important to be aware of any changes to your credit report. You can get a free credit report every year from the three major credit bureaus—Equifax, Experian and TransUnion. You can also get your credit score from the same three bureaus.
Key Points:
• A good credit score generally falls into the range of 650 to 749 on the FICO® Scale.
• Scores above 750 are considered excellent, while scores below 650 are considered poor.
• The FICO® Scale is based on Payment History (35%), Amounts Owed (30%), Length of Credit History (15%), Credit Mix (10%), and New Credit (10%).
• To improve your credit score, make sure that you’re making all of your payments on time and paying off your debt.
• You can get a free credit report every year from the three major credit bureaus—Equifax, Experian and TransUnion.
People Also Ask:
Q: How can I improve my credit score?
A: To improve your credit score, make sure that you’re making all of your payments on time and paying off your debt. You can also contact the three major credit bureaus—Equifax, Experian and TransUnion—to dispute any inaccurate information on your credit report.
Q: What is the highest credit score?
A: The highest credit score is 850 on the FICO® Scale. This score is considered excellent, and it indicates that you have a history of making payments on time and managing your debt responsibly.
Q: How often should I check my credit score?
A: You can get a free credit report every year from the three major credit bureaus—Equifax, Experian and TransUnion. Additionally, there are a number of websites that offer free credit monitoring services, so you can check your credit score more frequently.
What is a good credit score? – Best Deal Right Now?
What’s a good credit score and how do I get one? Depends on who you ask, generally 720 and above is good while 750 is considered excellent, but lenders each have different standards. Check out the video to see ways in which you can improve your score.
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