What Is A Good Credit Score?
May 20, 2022 | Daniel Dewitt
You’ve probably heard it a million times: make sure to maintain your credit score and keep it high. However, what is a good credit score? It’s impossible to actually keep a good credit score if you don’t know the bar you are shooting for.
In this article, you will learn exactly what is a good credit score, why a good credit score matters, and how to increase your credit score one day at a time. Let’s get started.
What Is A Good Credit Score? A Simple Explanation
Credit scores are typically separated into five different categories. The lower your credit score is, the worse it is. Conversely, higher credit scores are incredibly good. The five categories for a credit score include:
- Bad: 579 and below
- Fair: 580-669
- Good: 670-739
- Very good: 740-799
- Excellent 800 and above
Anything below 579 is considered a bad credit score. You always want to keep your credit score above this mark. Fair credit scores are those between 580 and 669. What is a good credit score, though?
Good credit scores are generally between 670 and 739. If you have a credit score between 740 and 799, you have a very good credit score. Lastly, any credit score scored 800 and above is considered excellent. Always shoot for this excellent mark, but don’t be disappointed if you aren’t there yet.
Why Does Credit Score Matter?
It’s important to try to keep your credit score as high as possible. Your credit score is used to determine your trustworthiness or creditworthiness by lenders. If you have a poor credit score, it can be difficult to get the loan you need.
Your credit score will be considered whenever you apply for credit cards, mortgages, loans, and auto loans. Your credit score may determine whether or not you are approved or which interest rates and terms you fall under.
The better your credit score, the better your prospects will be at getting approved for a credit score with a good interest rate. By good interest rate, we mean one that is as low as possible.
How Can I Increase My Credit Score?If your credit score could be improved, it’s important to do everything in your power to increase it. Although increasing your credit score will take some time, every little effort you make will matter.
Pay Bills On Time
Most importantly, make sure to pay your bills on time. Forgetting your bill by a day and paying it off as soon as you recognize the mistake will not affect your credit score. However, failing to pay your bill repeatedly or for multiple weeks will. Pay your bills as soon as possible to increase your credit score.
Pay Off Debts
In addition to paying your bills, make sure you pay off debts. The faster you pay off your debts, the better. There are various debt-paying methods you can select. We recommend starting with the snowball method.
Use Credit Strategically
The last way to increase your credit score is to use credit strategically. On the one hand, you need to use some credit. Using some credit proves that you are responsible for credit and will pay it back. On the other hand, you don’t want to use so much credit that it puts you in the hole or flags you as a risk.
As a rule of thumb, only use credit when you know you can pay it off. Additionally, never use above 35% of your maximum loan amount. This 35% refers to your utilization rate. Using above 35% will decrease you are credit score.
How To Get A Loan With Bad Credit
If you have a bad credit score currently, it can be difficult to get the loan money you need. Even so, you may find yourself in an emergency situation that calls for a loan. What should you do when you’re in this scenario?
The good news is that there are some loan types that do not require good or even existing credit. In other words, you can apply for these loans even if you have bad or nonexistent credit. You just have to know which loans are available for you.
Title loans are an option, even if you don’t have good credit. To apply for a title loan online, you will need a driver’s license or state-issued ID, a lien-free title to your vehicle, and your vehicle for inspection. As long as you have these three things, you can qualify for title loans worth up to $10,000 from New Mexico Title Loans, Inc.
Apply For A Title Loan Online!
What is a good credit score? A credit score that falls between 670 and 739 is considered good. Anything above 739 is considered very good or excellent. Even if you do not have a good credit score, you can apply for a title loan by filling out this New Mexico Title Loans, Inc. inquiry form. Get started today!
Note: The content provided in this article is only for informational purposes, and you should contact your financial advisor about your specific financial situation.