What’s a Good Credit Score According to Experts?
There is plenty of confusion as to what constitutes a good credit score. Some people are under the impression that a credit score of 650 is good. Others believe a credit score of 800 or higher is considered good. Below, we separate truth from fiction to finally reveal what constitutes a good credit score.
A Good Credit Score According to the Experts
The credit score system stretches from 300 all the way to 850. Industry experts insist a good credit score is at least 690. In general, bad credit is a score below 650. Those with a credit score of 650 to 699 have fair credit. As noted above, good credit starts around 700. A credit score of 750 or higher is considered excellent.
Credit score experts form their opinions based on the criteria of the country’s top credit scoring systems: VantageScore and FICO. Even if your credit score is not around 700 or higher, you still might be viewed as unworthy of a loan or a line of credit if the lender has distinct standards for what constitutes a good credit score. Another part of the reason why experts insist good credit scores start around the 700 level is most people have a credit score of 650 or above. Lending institutions have only so much money to lend so the credit scores of other loan-seekers matters in the context of determining who is deserving of the money. In general, if your credit score is equal to or superior to that of the majority of other loan applicants, the lender is likely to approve your application.
Why a Good Credit Score is Important
Ask anyone who has a poor credit score about how their life is going and you will likely receive quite the negative response. Those who have poor credit or even average credit find it difficult to live life to the fullest. If you do not have a good credit score in the range of 700 or higher, you might not qualify for a job that requires handling money as employers will assume you cannot be trusted with anything related to finance. Making matters worse is the fact that plenty of landlords run credit checks before allowing tenants to live at a property. If your credit is poor, you might not be able to live at the apartment your have been eyeing. Even if the landlord approves you to rent the apartment, you might have to pay twice the typical security deposit to secure the unit.
Good credit is imperative for obtaining a line of credit and a loan. In particular, bad credit will preclude you from obtaining a home loan. Though there are some programs available for people with an average credit score or limited credit history to secure a home loan, the majority of home loan lenders will not hesitate to deny applicants with average or poor credit score. It will also be challenging to secure a car loan with bad credit. Though there are some car dealerships that market their services to those with bad credit, the interest rate or vehicle sale price are usually jacked up to compensate for the dealership’s risk in selling/leasing to an individual with bad credit.