What is a good credit score

A credit score is a numerical value that represents your credit worthiness. This credit score is used by lenders when deciding whether or not you will be approved for credit. Some lenders will utilize both your numerical credit score and the actual information on your credit report while other lenders will focus on one or the other which means we all, as consumers, need to know the answer to the question: What is a good credit score?

What Is A Good Score and Why Does It Matter?

The credit score values range from 300 to 850 with 300 representing the lowest possible score and 850 representing the highest. Our credit scores are determined by taking into account a number of factors including, but not limited to; number of late payments, amount of debt, length of credit history, type of credit used, and number of credit inquiries.

The reason consumer credit scores are so important is because, for many lenders, these number represent whether or not you are going to be able to qualify for credit. There are many lenders who only use this numerical value so if it is in the lower range there is a good chance that you will not be extended the credit you want or need.

Each major credit reporting agency determines its own credit score based on the information that is currently being reported to it. This means that each of us could have three different credit scores just like we have three different credit reports. What does this mean? That just like our credit reports we need to make sure that we review each of our three credit scores and do what we can to keep them all as high as possible.

When it comes to the question of what is a good credit score the higher your determined number rating is the better your credit score is. Recently 60% of the people in the United States of America reported as having credit scores between 650 and 799 which the average score being about 723. Any score of 660 to 700 is usually considered fair with 700 and above being considered as good.

Knowing what is a good credit score is extremely important before applying for any sort of loan since so many lenders base loans solely on your credit score. There are some lenders who will give more rate to your credit score than to your income and a few who will tell you out right that if you have a credit score below a certain number you will not qualify for a loan with them. Knowing your credit score will let you know where you stand with lenders and can give you an idea of whether or not you need to work more on checking on the items being reported as part of your credit history.