• mmoh-tim

What is a Good Credit Score?

Updated: Jun 23, 2019

Your credit score is the number lenders use to assess your ability to repay a loan. There are three credit bureaus who assign the score and each company's score may be slightly different.

The score range is between 300 and 850. The higher your score, the better it is to borrow money. Your score may determine if you get approved for a loan. It may also determine if you will pay a higher or lower interest rate on the loan. Other companies, like insurance companies, use the score to assess credit risk.

A good score is determined to be 670, while the U. S. average is 695. A higher score of between 740 and 799 is considered to be very good. This is important for larger loans, such as mortgages and auto loans, and loans with longer terms.

Factors that determine your score include your payment history, your credit utilization (credit outstanding divided by total credit available), the length of your credit history, how much new credit you have, and your current credit mix (auto loans, a mortgage, credit cards, department stores, etc.)

Many credit cards offer checking your credit score as service to their customers. You can pay for your score from one of the credit bureaus (Equifax, Experian, and Transunion). Sign up and for a nominal fee, they will send your score. Make sure you don't sign up for any long term service they may provide, if you don't want it. Usually, you can sign up and then cancel the service within 7 days.

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