Before we talk about a good Credit Score lets discuss about what does a “credit score” even mean?
When you apply for any kind of loan , the lender bank or company will take a close look at your credit score. Credit history is maintained in your credit History. It is a number between 300 and 900 that shows how much and how long you’ve had credit and how well you’ve paid it off.
The more likely you are to not pay back the loan, the lower your score will be, so if you do get a loan, the higher interest rate will reflect this risk.
A Good Credit Score
When we say a credit score is “good,” what do we mean? The agencies aren’t always clear about what the scores really mean. You might have read somewhere else that a score between 600 and 750 is “good,” while a score between 750 and 900 is “excellent.” But if your score is between 600 and 650, you are dangerously close to the “fair” credit category. This means that lenders are likely to see you as a higher loan risk. If you can get credit at all, you’ll probably pay more in interest than someone with a score just 20 or 30 points higher than yours. So try to get at least 700, which is a good score by any measure.
How do you improve a bad credit score or get a good one?
Having a long credit history is important for getting a good credit score. Credit history makes up 15% of what makes up a score, so on average, older people tend to have higher scores than younger people. But paying bills on time is the most important and most obvious thing to do. Staying well below your credit limit on each card and spreading balances across more than one card can also help. If your credit history isn’t very good, there’s no quick way to fix it, but a common suggestion is to check your credit report for any mistakes that could hurt your credit history.