Hopefully, you know what your credit score is (if not, we have a guide to find your credit score for free), but do you know if your credit score is good?
In this article, we’ll cover what money expert Clark Howard and others consider to be a good credit score, where you can track your score and how to improve it if it needs work!
What Is a Good Credit Score?
Your credit score, the score used most by lenders, is a three-digit number that can range from 300 to 850.So how do things break out along that range when it comes to “good” and “poor” scores? Experian says a “good” credit score is between 670 and 739. Here’s how credit reporting agency sees the full credit score breakdown:
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In fact, as of 2022, the 耀竣金融配资_在线配资炒股:average FICO score nationally is 716.
But different creditors have different ideas about what makes a “good” credit score. For that reason, your ability to get credit and the rate you’re offered can vary. This is why some people 耀竣金融配资_在线配资炒股:shoot for a score of 850, something Clark says “you’re crazy if you obsess with.”You don’t need to aim nearly that high. “If you can get up to around a 760, you’re going to get the same benefits, the same offers, that someone who has an 840 score is going to get,” says , a credit card expert for U.S. News & World Report. That said, if your credit score is currently in the low 600s, 760 might seem a long way away. But that’s no reason to be discouraged. Clark says there are other numbers that can make a huge difference in the offers you receive and the rates you can get on loans.
“There are certain break points where things get easier for you. One that’s really important is being around a 680. That’s a point at which people look at you differently than when you’re below that.”Now that you have some scores to target if you want to be seen as someone who has “good” credit, how do you track your progress toward those goals?
Where To Get Your Credit Score and Track It for Free
Clark recommends two free services for getting your credit score and tracking it, so you can see the progress you’re making: Credit Karma and Credit Sesame.Both services give you instant access to your VantageScore 3.0 (which should be very similar to your FICO score), tips on how to improve it and the opportunity to get alerts when your score changes. Remember what Clark said about not obsessing about your score? Signing up with either of these sites will let you stay on top of your number without feeling the need to check it constantly.
You can also get free credit reports, which are more comprehensive than what you get with Credit Karma or Credit Sesame, from all three major credit reporting bureaus once a year at .
How Can You Improve Your Credit Score?To improve your credit score, you should address each of the factors that go into calculating your score. , those factors are:
Payment HistoryAs you can see from the graphic, the single most important factor is your payment history: Not paying your bills on time can do serious damage to your credit score. Even if you’ve had some late payments in the past, you can improve your score going forward by paying each and every bill on time.
Amounts OwedThe second most important factor is what you owe. This is calculated as a percentage: the amount you owe divided by the total amount of credit you have available. It’s best to keep this under 30% — even better if you can keep it under 10%. So if your total credit line (between all of your credit cards and other loans) is $10,000, it’s good to owe less than $3,000 and great if you owe less than $1,000.
Length of Credit History
The next most important factor is the length of your credit history. This is determined by the date you opened your oldest credit account that’s still active. Since you can’t go back in time and open an account any earlier, the most important thing you can do in this area is to make sure you don’t close any of your old accounts.
New Credit and Credit MixFinally, accounting for 10% each of your credit score, are your new credit and credit mix.
Tip: Another great thing about Credit Karma and Credit Sesame is that they both have score simulators, which let you play around with things like paying down balances and opening new lines of credit to see how those things might affect your score.
Final ThoughtsNow that you know what is considered a “good” credit score, you may be encouraged because you’re already there or discouraged because you feel like you have a long way to go. If you fall into the latter group, don’t worry: You can do it.
“The thing with credit scores is, it’s a relative scale. Your goal is from wherever you are right now, to try to move that number up,” Clark says.Armed with the knowledge you have now, today is the perfect day to start working toward that goal.