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What is a Good Credit Score?

What Does It Mean?

To be able to distinguish what a good credit score is one must know what it is the first place. A credit score is a three digit number that indicates your creditworthiness as a borrower. Those three numbers are accurately calculated to reflect your credit history, and every dirty little secret you have in there, if any, and how it compares you to millions of other borrowers. It reveals if you are credible or not when it comes to paying bills and loans. It will mirror your promptness in paying, so if you are the kind of person who makes all payments in time, if you were never charged a fine or penalty for late payments, and have never filed for bankruptcy, then you are most likely to have a good credit score. A good credit score means that you are a financially responsible person.

Having a good credit score is very advantageous because it means that most credit benefits will apply to you. A good credit score means good financial perks on your part. Financial options will be made available for you, setting up loans will be easier, and interest rates applied to you are smaller. Whether you are applying for a credit card or mortgage, a good credit score will ensure your legibility. With this in mind, you can pretty much see what a bad credit score will bring you: difficulty in applying loans, limited financial options if there is actually any at all, higher interest rates if you even pull enough credit score to qualify, and it may also affect employment opportunities because some, if not most employers, ask for credit reports before hiring a person.

What is a good credit score range then? The rating goes like this: 760-849 are excellent scores and will land you the best interest rates. 700-759 are great enough scores; it means you will not have difficulty in finding a loan with a good interest rate. 660-669 are still good credit scores; it means you can still get loans at good interest rates with this. 620-659 are fair scores; it means you may qualify for a loan but the interest rate will be rather steep. 580-619 are poor scores; it means you may probably still qualify but no doubt that the interest rate will be very high. 500-579 are very poor scores; it means that it is doubtful for you to even qualify for a loan, and in the rare event that you do, the interest rates will be incredibly high.

As you can see, the demarcation line between the categories of these credit scores is by one number. If you have a credit score of 658, you are only two scores away from a better rate that could possibly save you thousands of dollars. Fortunately, you can check your credit score online to see where you stand and plan how you can reflect what a good credit score is. Simple ways like making loan payments on time with the right amount, not over-extending your credit limit, not piling up your overdue bills and debts, and managing how much you use your credit cards can help you attain what is viewed as a good credit score.

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