Your credit score is an important figure you should work hard to build and maintain. It directly affects your ability to get a loan, buy a house and even rent an apartment. Most people are familiar with the basic concept of a credit score, and newer options like a credit building debit card make it easier to establish a credit history.
But have you ever wondered what banks consider “good?” Read on to learn more.
Breaking Down the Credit Score Ranges
Credit scores range from 300 to 850, and lenders typically view the spectrum in different ranges.
On the lower end, you have a poor credit score between 300 and 579. Next is “fair.” Fair scores are from 580 to 669.
The middle of the credit score spectrum is “good.” It includes scores between 670 and 739. Not all lenders follow that basic range. Many don’t consider anything less than 700 a good score. However, that all depends on the lender you work with.
Next are “very good” and “excellent.” A very good score is between 740 and 799, while an excellent score is 800 and up.
The Impact of Scoring Models
It’s important to remember that there are three credit bureaus. They include Experian, Equifax and TransUnion. Not all lenders report to each bureau, so there’s some variation based on where you get your report. As a rule of thumb, anything over 700 is a good score.
However, different scoring models may look at the “good” range differently. For example, a good FICO score is between 670 and 739. Meanwhile, a good VantageScore is between 661 and 780.
FICO also does different types of credit scores. In addition to scores that all lenders can use, FICO calculates industry-specific scores for credit cards and auto loan lenders. The range for those scores is between 250 and 900.
What Contributes to Your Credit Score?
Several factors will affect your credit score. The biggest is your payment history. Missed payments can harm your score significantly. However, on-time payments with a credit building debit card can help you establish positive history.
Other factors include how much of your available credit you use, how long you’ve had a credit history, what types of accounts you hold and how many accounts you recently opened.
Author Resource:-
Daniel Stewart writes about student debit cards and taking control of your finances services. You can find his thoughts at banking for students blog.
