If you are wondering what a credit score is, then our brief guide will help you better. Have you ever tried or planned to purchase any home or vehicle that holds a high ticket price? Yes, then credit score is something that your financial corporation, bank, or money lender will surely ask for. It is a three-digit score that helps the creditors to evaluate and record your financial information that is present in your annual credit report. This easy to use number is calculated based on your credit mix. So whether you want to redeem reward points on your credit card, apply for a mortgage, auto loan, or a home loan, it is undoubtedly going to be the most prominent aspect.
The categories are commonly divided between good and bad credit scores. Here’s a breakdown of it.
- Bad - 300 to 650
- Fair - 651 to 700
- Good - 701 to 759
- Excellent - 760 and above.
What goes into a good credit score?
Several factors come in this row, and that is applicable in various credit score models. Payment history from your previous financial records takes accounts for almost 35% of your score. Whereas credit utilization, duration of credits, new hard inquiries, and credit mix accumulate 30%, 15%, 10%, and 10%, respectively.
If you are pondering that what is a good credit score or is 750 a good credit score, then it is essential to know that the scores vary according to the model - Vantage and FICO. Generally, scores that are above 700 are considered as the excellent scores for both the models.
Having a good score like 750 exhibits that you are highly responsible when it comes to your financial commitments like credit cards and mortgages. Typically, it also states that you are a reliable borrower as you make payments on time without missing them or delaying them. Plus, if you ever apply for a loan or a new credit card with a higher limit, surely you are going to receive plenty of benefits along with a much lower interest rate.
Also, we have put together the top two benefits points in detail that come with a good credit score. Have a closer look.
1. High chances of landing a house
Similarly, like a potential moneylender, your landlord may inspect your credit score, which will determine your financial stature. In simple words, it allows him or her to have a clear idea of how better you are going to be with the monthly rentals or EMIs (if you are buying a new house). Otherwise, you may end up paying a much higher rate than the standard market value, or either you have to pay a hefty amount of security deposit.
2. Eligible for deals
A good credit score - above 700 simply qualifies you for the best mortgage and credit card deals. It will also serve you impressive interest rates, reward points, and more benefits like cashback facility. It gradually helps you to save enough money and keep boosting your credit score.
And if, in any case, you have a bad or a fair credit score, and look forward to having a good credit score, then it is better to seek professional’s assistance. It will help you to streamline your every single financial activity while eliminating the odds. You can begin with finding a reliable credit repair agency near you, who is certified and doesn’t tempt you with false deals.
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