What is a Good Credit Score Definition?
First of all, what is a Good Credit Score or what is considered a good credit score, in this article, you find out what a good credit score is, to begin with? Generally, when applying for financial products that include insurance, credit card, and more, your credit score determines the level of quick qualification. However, with a good credit score, you can enjoy a lot of benefits and rates, especially when applying for a loan. But most times with difficult to highlight if a particular credit score is good or not. This is because the factors that are considered whether you have a good credit score depends on the type of loan you’re applying for.
According to reports, 690 to 719 is what is considered a good credit score from FICO scores and VantageScores. On the credit score range, a score between 690 and 719 is considered a good score, and any score about 720 is considered excellent. But a score that is between 630 and 689 is considered fair and scores that fell below 630 are considered a bad credit range. With bad credit, you might not be opportune to enjoy what a good credit score enjoys.
However, there are two most popular credit scoring systems used to score your credit which include FICO and VantageScore. FICO is the most commonly used credit scoring system and you can know what is considered good credit scores between VantageScore and FICO.
What is a Good FICO Score?
FICO considers a good score that lies between 670 and 739 based on the information from the FICO website that states that a score between 580 and 669 is what is considered a fair credit score. While 740 and 799 are what are considered very good credit scores. Also, if the credit score range is over 800 is considered exceptional.
Based on FICO, an average credit score in 2021 was 716 and it falls into the category of a good score. The information that determines your credit score is from three major credit reporting bureaus which include TransUnion, Equifax, and Experian.
What is a Good VantageScore?
FICO competitor which is VantageScore has the same credit score range and uses the same credit report data from TransUnion, Equifax, and Experian. For VantageScore, what is considered a good credit lies between 661 and 780 which the company identifies as a prime credit tier. Above 780 is considered superprime and score range between 601 and 660 is called near prime and below 600 is considered subprime. As of 2021 the average VantageScore 3.0 was 693.
Why is a Good Credit Score Important?
A good credit score is so important because it provides you with a lot of benefits for financial transactions. A good credit score that gets you what a bad credit can’t which includes qualification to borrow money and also help in reducing the interest rate.
As a beginner, having good credit allows you to access more credit card benefits and options. It actually doesn’t matter if your score moves to an excellent range score, you instantly have access to more card possibilities. As a matter of fact, the best rewards card qualification includes good to excellent credit.
Another reason why you need to have a good credit score is that you have access to enjoy lower interest rates. Most credit cards come with variable interest rates that range between the line from 13 percent to 26 percent. You can know your assigned internet rate not until you have been approved, but with a good score, you can use that to determine whether or not you have a high or low rate.
Likewise, your credit score determines whether you’ll be approved for a loan including a home mortgage or car loan, and also the interest rate you might encounter. But with a good to excellent credit score, you don’t need to worry about that.
Frequently Asked Questions on What is a Good Credit Score?
What is a good credit score to buy house?
According to reports, this depends on the type of loan you’re applying for. For conventional loan requirements, the credit score is 620 or higher. If your credit is below 620, you won’t be approved for the loan or it might come with a higher interest rate if you choose to apply for it.
While for FHA loan requirement is 580, the VA loan requirement is at least 580 and for USDA credit score to buy a house is 640.
How often is a credit score updated?
Based on the question “how often is a credit score updated” it takes every 45 days or a month for your credit score to update. However, your credit reports are updated from recent information provided by lenders to the nationwide credit reporting agencies.
What is a very good credit score?
Generally, a very good credit score lies between 740 and 799, and from 800 and up is considered very very good or excellent credit. But good credit is between 670 to 739 and below 699 is considered fair or bad.
What is a good credit score with Equifax?
Yes, good credit with Equifax is considered between 670 to 739, and from 740 to 799 are considered very good and 800 and up is excellent credit.