Credit cards: What is considered a good credit score
Eden Villalovas
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A good credit score is crucial to gain access to the best credit cards and is key to qualifying for mortgages, securing the best car insurance premiums, and applying for loans.
Payment history, time since opening a credit card, and the amount of debt someone holds are all factors in determining the score.
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A credit score is a three-digit rating from 300 to 850 that’s calculated based on the status of credit reports.
While different lenders have varying standards for rating credit scores, a score between 670 and 739 is typically considered good. According to Equifax, a score between 580 and 669 is considered fair, and a score between 740 and 799 is considered very good. Scores of 800 and above are excellent.
Credit scores are used by lenders to assess your potential credit risk, and the higher the score, the more likely creditors will note the applicant is responsible and deserves higher rewards or benefits.
Lenders view individuals with a credit score of 670 or higher as lower-risk borrowers, according to Equifax. Those who are in the 580 to 669 range may struggle more to qualify for a better loan. Lower scores, under 580, are considered poor credit and may not qualify at all for credit or more loan terms.
To improve, maintain, or earn a first-time credit score, individuals can follow a number of key responsibilities for a good credit score.
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Some of these factors include keeping your credit card balance below your specified credit limit and not spending all the credit at a time. Paying off your debts and bills on time consistently will also help increase your score.
Applying for multiple lines of credit in a short time may harm your score, and checking your credit score can help you monitor your credit usage.