A good credit score can make a real difference in your life, whether it’s getting a loan, buying a car, or renting an apartment. And according to Forbes, a good credit score saves you about $35,000 per $100,000 you borrow for a mortgage.
Credit scores help lenders determine, at a fundamental level, whether or not to give a loan to an individual. According to Credit.com, credit scores “help lenders decide whether [a person] is a good risk.” For example, a person’s credit score can determine the interest rate they receive on debt, the terms of a loan, and whether they can get a loan in the first place.
With something as important as credit, you’ll want to know what precisely good means. Thankfully, the answer to “what is a good credit score” is made transparent by FICO. Your credit score is a number in the range from 300 to 850, and Americans with a credit score above 670 have a “good” credit score.
Despite their importance, only 21% of Americans have a good credit score. So if you find yourself missing payments or in credit card debt due to keeping up with jones, it’s time to evaluate your spending. Understanding what goes into your credit score and its influences may help improve it. Here are all the pieces of the recipe.
Understanding “what is a good credit score” is the first step towards improving it. Here are three tangible steps to help you improve your score.