We all know how important it is to have good credit. Good credit helps us to get new lines of credit if we need them. They also help us to get good terms on a car loan, and to purchase a house when we’re ready to do that. It tells potential lenders that based on your history, you are responsible, and that you won’t be a high risk for them to lend money to.
The power of having a good credit score cannot be disputed. It is general knowledge that you want to have a good credit score. But there is still some confusion surrounding what a good credit score is.
What would be considered a good credit score?
We all want to have a good credit score. The problem is, many of us don’t know exactly what that is. What is considered a good credit score? Lexington Law, a credit repair company, defined “good credit” this way: “[Good credit is a] financial industry term for a credit history indicating that a person is a low credit risk. A credit score of greater than 680 is generally considered to be a good credit score.”
So, we know that “good credit” is basically defined as a measure telling potential creditors that you are a low credit risk. This is what tells them that you are a safe bet to lend money to. And we can see that any score greater than 680 is considered a “good credit score.”
There is a difference between good credit and great credit.
680 is considered a good credit score. But if you have a credit score of 680 that doesn’t mean that your score is perfect. If your score is in that range, you could still make some improvements. You could still work to achieve a great credit score. Having a good score can help you to receive new lines of credit. But having a great score provides you with even more benefits.
What is a great credit score? It is a score of 750 or higher. If you have a score in that range, the sky’s the limit for you! This type of credit score shows potential lenders that you are the “cream of the crop.” That lending to you poses to them virtually no risk. This will allow you to never really have to worry about being turned down for new credit, and gives you the ability to receive the best interest rates on your loans.
Luckily, it generally isn’t too difficult to raise your credit score from good to great. It could be as simple as paying down some balances. You may also want to check out your credit reports and make sure there aren’t any inaccurate items on there. If you do notice any inaccurate items on there, do what it takes to have those negative items removed. That could mean the difference between you moving from a good credit score to a great credit score.
This is a guest post. The author of this article, Nicole, has years of experience with credit. She enjoys teaching people about how to repair their credit.
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