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What is a good credit score

What is a good credit score

What is a good credit score?

Have you seen that annoying pervasive sign? The one that flashes an alert on your screen, asking you to “don’t miss this”? There are plenty of similar signs like this one, and probably many of them in your place of business.Robin Saks Frankel is a credit cards and personal finance writer for Forbes Advisor. Previously, she covered credit cards and related content at other national web publications including NerdWallet, Bankrate and HerMoney. She's been featured as a personal finance expert in outlets including CNBC, Business Insider, CBS Marketplace, and has appeared on or contributed to Fox News, CBS Radio, ABC Radio, NPR, International Business Times and NBC, ABC and CBS TV affiliates nationwide. Follow her on Twitter at @robinsaks. Having poor credit scores can make it difficult to get approved for a loan or unsecured credit card. But a poor credit score isn’t a financial dead end. Certain financial products, like secured credit cards, can help people who are working on building their credit. These products can be a helpful stepping-stone to accessing credit with better terms — if you use them carefully.

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A $942 per month car loan payment is a significant amount, even if you can get approved. So, let’s assume you hit the pause button and decide to work on improving your credit before taking out a loan. When you apply again down the line, you learn that you’ve boosted your score to a 670, which is considered a “good” credit score by most credit scoring models. Like other lenders, credit card issuers will consult your credit score to determine the risk of doing business with you before approving you for a new credit card. If you want to open a premium travel rewards credit card, you may need good and perhaps even excellent credit scores to qualify. For other types of credit cards, even some with 0% introductory APR offers, a good credit score may be sufficient to be approved for the card.

While you’re comparing your options, know that applying for a new loan or credit card may result in a hard inquiry, which can have a negative impact on your scores. Loans with preapproval or prequalification options can give you an idea of the terms you might qualify for ahead of time. Your Credit Karma Approval Odds may also be able to help you decide if a loan or a credit card is worth applying for or not. The credit score you see if you’re signed up for TransUnion Credit Monitoring or if you purchased a credit score with your credit report is based on the VantageScore® 3.0 model. Scores in this model range from 300 to 850. A good score with TransUnion and VantageScore® 3.0 is between 720 and 780. As your score climbs through and above this range, you can benefit from the increased freedom and flexibility healthy credit brings. Some people want to achieve a score of 850, the highest credit score possible. Having this “perfect” score may feel like a win, but it isn’t necessary to enjoy the benefits of strong credit.

CARD

Nearly every facet of your financial life is impacted by the strength of your credit score, from loan and mortgage applications, and even something as essential as a lease on a new apartment. A good credit score can also qualify you for the best introductory offers and rewards credit cards with VIP perks like concert ticket presales, exclusive events and even, in some cases, luxury concierge service (read more about the Black Card's elite rewards). For starters, you may be pre-approved or pre-qualified for more credit card offers if you have a good score. That may allow you to compare offers and find the best fit for your situation—whether you’re looking at mortgages, credit cards or auto loans. But if you’re shopping around, be sure to understand how credit inquiries can affect your credit. Generally, a credit score above 720 can be considered good – no matter the application. Your age, what type of loan you're applying for, and your past credit history are just some of the factors that can influence the terms you'll be afforded. Ultimately, these are the things that determine what constitutes a 'good credit score'. The 720 number mentioned above will generally allow you to qualify for top-of-the-line credit cards and low interest rates across a number of banks and vendors.

It’s important to understand lenders care much more about your credit history rather than just your credit score. The three-digit number is usually just a quick filter used to handle large volumes of applications. Beyond that, the items contained in your credit history will play a role in determining your credit worthiness. For example, having a credit score of 740 is good for anyone looking for a credit card. However, you may not qualify for certain credit cards if your oldest credit account is just 12 months old. Government regulations passed in 2009 make it more difficult for individuals below the age of 21 to open a credit account. This is a major contributing factor behind this age group struggling to attain good credit scores (or any score at all). To combat this, young adults who wish to get a good credit score should try to open up a student credit card. The requirements for these tend to be more lax. At the same time, however, they will generally not give you access to a large line of credit. Individuals with college credit card accounts, more than any other group, should be mindful of how much money they charge to their card. As we'll elaborate in the following section, it's crucial to keep your credit utilization low if you wish you establish a good credit score. (Source: www.valuepenguin.com)

 

 

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