What is a Good Credit Score?

What is a Good Credit Score?

Your credit score is a calculated number which summarizes your credit risk to lenders. Credit scores may also be referred to as FICO, BEACON, OR FICO Risk scores. In order to calculate a credit score, you must have a minimum of one account open for at least six months that has been reported to the credit bureau. The numbers on the FICO score range from generally between 300 to 850. When examining a credit score, one of the main objectives of the lender is to predict whether or not a potential borrower is likely to make timely payments over the course of the next two to three years. This article was researched from information found at www.usa.gov and www.annualcreditreport.com.

A good credit score will range in the area of 700 or above. 850 is a perfect credit score rating. A score of 300 is the worst. With a score of 700 or higher, you will find it easier to obtain credit cards or loans. A good rating will also enable you to rent an apartment and even get lower rates on your insurance.

In order to improve your credit score, you will need a copy of your credit report. When you get a copy of this, you will be able to see all of the negative statements on it. You will be able to see which companies have reported unfavorable information about you. When you see what is negatively impacting your score, you have the ability to either settle the issue with the creditor or dispute it if you find it to be inaccurate.

A good FICO score is a necessity for anyone who plans to borrow money for any purpose, large or small. People who are seeking a loan for a house, car, or any other major asset will definitely require a decent credit score for consideration from a bank or any sort of lending institution. A good score is a major benefit towards your purchasing power, however, consumers should still use credit with caution to avoid debt. Getting excessive credit can become a problem for many people at one time or another in their lives if they are unable to keep up with the payments.

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