Everything You Need to Know About What Credit Score is Considered Good

Are you trying to learn what credit score is considered good and why? A good credit score is an important part of your financial well-being, so understanding what it means and how it’s calculated can help ensure that you maintain a good standing with lenders.

What Factors Into Your Credit Score? 

Your credit score is calculated based on several factors, including your payment history, the amounts and types of credit that you have, how long you’ve been using credit and how much new credit you have taken out. The most important factor influencing your score is your payment history, so making sure to pay all of your bills on time can have a major impact on your score. Having a diverse mix of types of credit (credit cards, auto loans, student loans, mortgages) and keeping low balances relative to available credit limits can both help your score grow.

What Is A Good Credit Score Range? 

While there is no exact number that defines a “good” credit score, generally any score over 700 is considered good. VantageScores range from 300 to 850 and FICO scores range from 300 to 900. Perfect credit scores are incredibly rare, so if you have a score in the high 700s or 800s you can be proud that your financial habits are in excellent shape!

Mistakes To Avoid When Dealing With Credit Scores

In order to keep your credit score healthy, you should avoid making the following mistakes when dealing with credit: missing payments, maxing out credit cards, applying for too much new credit at once, closing unused credit cards and taking on more debt than you can afford. Staying on top of your monthly payments and maintaining low balances on your credit cards are key habits to keep your credit score in shape.

Learn Your Credit Score Range.

It is important to learn what credit score range you fall into so that you can start putting best financial practices in place. Generally, a credit score anywhere from 670-739 is considered “good” and an 800 or higher is considered “excellent.” If your score falls somewhere in between these two ranges, you may want to take proactive steps to improve it and keep it strong.

Determine Your Credit Score Needs. 

Before you can know what kind of credit score is considered good, you’ll need to determine what your credit score needs are. Different types of loans and cards throughout the credit market carry different requirements for applicants. You might look for a loan with a minimum 660 credit score or could search for an elite credit card that comes with a 700+ FICO score requirement. This research can help you understand what kind of number you should aim for when improving your overall score.