Search

What is a Good Credit Score: Understanding Creditworthiness

A credit score between 690 and 719 is generally considered good in a range from 300 to 850. This guide will explain what is a good credit score and how to improve it.
What is a Good Credit Score: Understanding Creditworthiness
When was the last time you checked your credit score? If you're new to the credit field, you need to know what makes a good credit score. Read on to know more.
In this article

Your credit score helps you determine your creditworthiness. It also helps lenders such as banks and non-banking finance companies to decide if they can sanction loans or cards to you. Furthermore, your credit score has an impact on both the loan amount sanctioned and the interest rate owed by you. Additionally, lenders may reject a loan application if you have a low credit score.

A credit score between 690 and 719 is generally considered good in a range from 300 to 850. A score of 720 or higher is considered superior, while a score between 630 and 689 is considered fair. A credit score below 630 is considered bad credit.

What is a Credit Score?

An individual’s credit score is a three-digit number that represents their creditworthiness. When you apply for a loan, banks and other lending institutions check your credit score.

A credit score is calculated using many different scoring models, some of which also use other data. One of the factors they consider when determining if you will be able to repay a loan is your credit score.

VantageScore and FICO, the most widely known credit scoring systems, both use 300-850 as their range.

What Makes a Good Fico Score

According to the company’s website, a good FICO score falls between 670 and 739. A credit score of 580 and 669 is considered “fair,” and it it is between 740 and 799, it is considered “very good.” Anything above 800 is considered “exceptional.” 

FICO reports that the average score as of August 2022 was 716, which is considered good.

The FICO report was developed by Fair Isaac Corp., the first company to develop a credit scoring system. TransUnion, Equifax, and Experian are the three major credit bureaus that provide data about consumers.

What Qualifies a Good VantageScore

VantageScore, another competitor of FICO, produces similar scores using the same credit report data.

It is generally considered “prime” credit if the VantageScore falls between 661 and 780. “Superprime” scores range from 780 to 850, while “near prime” scores range from 601 to 660. Scores below 600 are considered “subprime.” Scores between 780 and 850 are classified as “superprime,” while scores between 601 and 660 are classified as “near prime.” A VantageScore below 600 is considered “subprime.”

A VantageScore 3.0 average of 695 was reported for the second quarter of 2021.

What Factors Affect Your Credit Scores?

The following are some tried and tested credit behaviors to keep in mind as you begin to establish or maintain a responsible credit history:

Keep track of your bills and pay them on time. In addition to credit cards, cell phones can be reported to the credit bureaus as late or missed payments, affecting your credit score. Whenever you have difficulties paying your bill, you should contact your lender right away. Even if you dispute the bill, it’s important not to skip payments.

  • Make sure you pay off your debts as soon as possible.
  • Don’t let your credit card balance climb above the limit. Credit scores may be negatively affected by high balances compared to credit limits.
  • Don’t overextend yourself when it comes to credit. You may have a negative impact on your credit score if you apply for multiple credit accounts within a short period of time.
  • Ensure that your credit report is up-to-date. Make sure your credit report contains accurate information and no incorrect or incomplete account information by requesting a free copy. 

You can Also See: How to protect your credit score effectively

Conclusion

Every time you visit Annual Credit Report, you can get a free copy of your credit report from each of the three nationwide credit bureaus. A copy of your reports can be obtained once every four months so that you can keep a close eye on them throughout the year. It won’t affect your credit scores if you check your own credit report or credit score.

Was this helpful?

Did you like the post or would you like to give some feedback? Let us know your opinion by clicking one of the buttons below!

👍👎
Team Beem

Team Beem

Team Beem brings you the latest in the world of personal finance to you. From tips and tricks on how to manage money to how to get cash for emergencies, Beem is your destination for all the information you need to be smart about your money.

This page is purely informational. Beem does not provide financial, legal or accounting advice. This article has been prepared for informational purposes only. It is not intended to provide financial, legal or accounting advice and should not be relied on for the same. Please consult your own financial, legal and accounting advisors before engaging in any transactions.

Related Posts

Best credit cards for everyday use in 2024
Since credit cards strive with everyday purchasing activity, it’s a great opportunity to use them often for your purchases to maximize rewards.
How many credit cards should you own?
How many credit cards is the ideal number to have? While there is no hard and fast specification to this, there are pros and cons of having multiple cards. It all boils down to how well you’re able to handle your finances and your credit cards. Use them wisely, and you will be able to build up excellent credit. But even a small mistake can cost your credit score dearly. Besides, the amount of total credit you have impacts your score as well. Read on to find out more.
Can you use a Credit Card at a Casino – Credit Card For Gambling
How to get 1000 dollars fast?
How to Get 1000 Dollars Fast?
Are you looking for quick cash? Discover many methods in our tutorial "How to Get $1,000 Fast." From freelancing work to renting out space, these 15 options provide insights for everyone while ensuring financial objectives are reached. Investigate possibilities, emphasize consistency, and use tools like the Beem app for fast funding.
Highest FICO Score – Know About What Is The Highest Credit Score
If your goal is to attain a perfect credit score, you have to aim for a credit score of 850. That’s the highest FICO score and VantageScore available for the most widely preferred versions of credit scoring models. 
Features
Essentials

Get up to $1,000 for emergencies

Send money to anyone in the US

Ger personalized financial insights

Monitor and grow credit score

Get up to 20% on everyday spends

Save up to 40% on car insurance

Get up to $1,000 for loss of income

Insure up to $1 Million

Coming Soon

File federal and state taxes at low cost

Quick estimate of your tax returns

Get up to $1,000 for emergencies

Send money to anyone in the US

Save big on auto insurance - compare quotes now!

Zip Code:
Zip Code: