Learn what a good credit score is and how to improve yours
Firstly, we need to review some basic information about credit before moving forward. So, three major credit bureaus regularly update and report your profile and credit history: Equifax, TransUnion, and Experian.
In general, those companies report the consumer’s credit history. And it includes repayment history, debt, open accounts, credit cards, and other items that directly impact the score.
Consequently, the credit score is calculated based on those items mentioned above. And the punctuation shows the market how responsible the consumer is.
The score usually ranges from 300 to 850, and each number equals your creditworthiness. For example, if you have 300, your creditworthiness is bad. On the other hand, if you have 850, it means you have a perfect credit history.
Taking this into consideration, a good credit score guarantees better financial products and services, including low costs on loans & cards, flexible terms & conditions, and higher rewards and earnings on accounts. But let’s take a look at what is considered a good credit score.
Is 700 a good credit score?
Yes, it is! Generally, scores of at least 700 are considered good. It depends on the scale model that is being used, but if we consider the FICO® Score range, a good score varies from 670 to 739.
Also, according to VantageScore®, good credit ranges from 661 to 780. If your score is 700, you are considered a consumer with low risk. In addition, you will be considered someone with the likelihood of paying a debt.
Therefore, you will be able to get better financial products and services on your way. For example, if you are searching for a credit card, you probably will be able to get one with a good rate of rewards and a zero annual fee. Also, if you need a loan, you probably will get one with lower interest rates.
On the other hand, let’s suppose your credit score is below 600. In this case, your punctuation falls into a fair score. So, you probably won’t be able to get the best options for loans, credit cards, accounts, and other products.
It doesn’t mean you won’t get anything. But, the range of financial possibilities is definitely less than those presented to good credit consumers. It is worse for those with bad credit or approximately 300 scores. In this case, it is essential to understand what is affecting the credit score and how to improve it quickly.
What kind of lines of credit can you get with a good credit score?
A good credit score guarantees many benefits regarding financial products, services, and deals. For example, if you have at least a 700 score, you could get premium credit cards full of rewards, including great rates on cash back and points at a very low cost.
Also, you could get large loans with flexible terms and better conditions, including low-interest rates and fewer fees. In addition, you could get better deals on your purchases since companies usually take a look at your reports on credit bureaus to find out your creditworthiness.
How to achieve a good credit score: 3 simple tips
If you don’t have a good credit score, you don’t need to worry because we have prepared five simple tips on how you can improve your credit score and, consequently, your punctuation. Check it out right below!
Bills: pay them on time
This is the first thing you must do. Missing payments or paying them later can cost you big. All those payments you forget or cannot afford go right into your reports. So, your score will be impacted and will decrease.
Therefore, the best way to increase your punctuation is to pay attention to your bill payments. If you usually forget them, set up alerts or even use the autopay option.
Also, it is crucial to have financial planning in order to control and keep track of your finances.
On the other hand, if you lose control of your bills and can’t afford them, it is important to address the issue and find a solution like negotiation.
Credit score: know your reports
Another essential point is understanding your reports and being aware of your score. If you don’t even know your credit score, you won’t be able to set up a plan to improve it. It is easy to be informed about it. So, you only need to have access to at least one of the three credit bureaus.
Lines of credit: be careful when applying
Normally, each time you apply for a different line of credit, your credit score is impacted. So, if you want to apply for a credit card or a loan, choose those that offer pre-qualification with no hard inquiry on your credit score.
Furthermore, it is recommended that you don’t hold many credit cards and don’t have many loans on your hands. Generally, credit bureaus read it as a potential failure regarding payments and financial control. Therefore, be careful when holding multiple lines of credit.
In case you need a line of credit to help you with your finances, look for credit cards designed to rebuild credit. Usually, there are good options available, and the issuers consider bad credit for the application and approval.
By holding a card builder, you can work on your credit improvement. But, first, follow the two tips mentioned above to have control of your finances. Once you figure out how to manage your expenses, you can start your journey to achieve the perfect credit score.