What FICO Score is Considered Good?
Posted By: Heather | January 7, 2015 | 0 Comment(s)
Why do credit cards only go to people with good credit, and what does the FICO score mean anyway?
The three digit score is basically your credit batting average, and like in baseball, the higher the number, the better. If you score a 720 or above, congratulations. You are in the credit “big leagues” with an excellent credit score. You won’t have any trouble getting a variety of credit cards with excellent perks and low interest rates.
With a score in the 690 to 720 range, you are considered a good credit risk. But, if your credit score is 630 or below, you are definitely in the minors and considered a bad credit risk.
Know the score
FICO stands for Fair Isaac Corporation, which developed the scoring systems used by the three major credit bureaus; TransUnion, Equifax and Experian. When you are denied a credit card, the card companies must reveal your score.
You have the right to a free copy of
your score from the issuing company within 60 days of being denied. You are also eligible for a free credit report from each of the three reporting bureaus every year.
Improve your stats
There are five elements that determine your credit score.
1. On time payments: always pay your bills on time. This will bolster your score more than anything else.
2. Amount of credit: lower the amount of available credit you use. Here, less is more.
3. Length of credit history: the longer credit companies see you handling credit the better.
4. New credit applications: too many credit applications in a short period of time will ding your credit score.
5. Kind of credit used: credit companies prefer to see a mix of credit. A variety show you know how to use credit responsibly.
Getting a good credit score for the best credit card deals is a long game. Get a couple of years of good credit habits under your belt, and you will be getting “big league” scores before you know it.