When it comes to credit scores, like everything else in life, “good” is in the eye of the beholder. Someone with good credit is in a position to obtain loans with better than average interest rates. However, if you want the best borrowing terms available in the marketplace, “good” likely won’t cut it. You need to shoot for “very good” at least.
There are three credit reporting companies that contribute to your credit report. That information is used to calculate your credit score which is the number lenders use to determine if you are a good risk.
If you ask most people in the know, 695 would be considered a good score. Others might actually say it’s only a “fair” score and that all scores under 700 could use some help. The “very good” range begins around 725 – that’s the number to shoot for if you want to get a loan, such as a mortgage, at the best lender rates.
How are Credit Scores Calculated
Your credit score is based on a number of pieces of data including amount you owe, payment history (whether you have many late payments in the past), the length of time you’ve had various lines of credit, the different types of credit lines you have and which types you are using.
Be Informed: Know the Details
Most experts suggest obtaining your complete credit score (a combination of all three numbers reported by the agencies) from a reputable source. You an find out all the details including why the numbers are calculated the way they are, how your score got to where it is now, how you rank against others in the same credit rating category, etc.
You may be thinking, why is that information important? If your credit score is hovering around 725 or higher and you are satisfied with that number, then keep on keepin’ on. However, if your score is less than that and you want to raise it to fall into the “very good” category, you need to know why the score isn’t higher. Some reasons may be obvious including bankruptcy or several major late or missed payments. Finally, you can check your three credit reports for free once every three months. You won’t get your credit score with your reports, but you will be able to determine if there are any errors on your credit report that are dragging your score down.
If you find a mistake, contact that particular reporting agency immediately. Errors on credit reports are not unusual but the havoc mistakes can cause for your credit score can be frustrating and detrimental to getting a loan you really want. You can’t fix a problem you don’t know exists.
If you have any questions about debt or your credit, contact an experienced bankruptcy lawyer who can help you improve your financial situation. Contact Joel R. Spivack, Esq., for sound legal advice.
