What Is A Good Credit Score

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Whether you have a good credit score or not can impact your ability to buy a lot of different things. It can also affect how much you pay, because the interest rate you’re offered is often a direct reflection of several monetary issues, including what your credit score is. There are a lot of opinions on what qualifies as a good credit score, and those opinions sometimes change, depending on how the economy is doing and whether the credit market is tight.

My Credit Score is 650 †Is That Good Enough?
In the past, 650 was often ‘good enough’ for a credit score. People could buy houses, cars, and all kinds of other things with a credit score like that. They didn’t have to worry about being approved, provided they had a decent income. The interest rates they paid weren’t even much higher than the people who had credit scores in the 700s. As the economy began to struggle, though, that all started to change, and the credit restrictions got tighter.

Does What I’m Buying Make a Difference?
What you’re ...
... trying to get credit for can affect what score is acceptable. Credit cards are often given to people whose credit is already a little bit questionable. Cars and houses, though, are harder to get. If you’re trying to buy an inexpensive, used car, you can get one much more easily than you can get an expensive, new car from a large dealership. Some smaller dealerships even offer financing right there on the lot for people with bad credit. Ask about the interest rate, because it will likely be very high †even as high as a credit card interest rate in some cases.

How to Get a Good Credit Score
If you want a better credit score so you can pay less in interest and qualify for better deals, you’re in luck. There are ways that you can help your credit score rise, and they’re simple things. Pay your bills on time. Don’t borrow more than you need. Pay off your credit cards, or at least pay them down as much as possible. If you do those things your credit score will rise. You won’t be considered as much of a risk to creditors, and that will help you in two ways. First, you’ll be more likely to be approved for credit. Second, you’ll be able to get a lower interest rate, which means your payments will be lower and you’ll be paying back less money overall.

Checking a Credit Score
If you don’t know what your credit score is, how do you know if it’s good? In a tight credit market, lenders are looking for credit scores over 720 for big purchases like home mortgages. Some prefer credit scores over 750. Even if you can’t get to that point, raising your credit score is a great way to see interest rates start to fall and approvals go up. You’ll have a lot better chance of qualifying for what you want to buy at a good interest rate if you can at least get your credit score over 700.