Having a good credit score is incredibly important in today’s world. It can help you get lower interest rates on loans, better credit cards, and even assist you in getting approved for rental applications. But what is considered a really good credit score and how can you achieve it? This article will discuss the factors that can help you achieve a good credit score and provide a clear understanding of what is considered a really good score.
A good credit score is generally considered to be a score of 670 or higher. This score is typically seen as desirable by lenders and is often used as a measure for approving loan applications or approving credit cards. Credit scores range from a low of 300 to a high of 850, so a score of 670 or higher is considered to be a good score.
Payment History
The factors that help you achieve a good credit score are generally the same across all credit scoring models. The first factor is payment history. Payment history accounts for 35% of your credit score and it is the most important factor. Making payments on time and in full can drastically improve your credit score and help you achieve a good score.
Credit Utilization
The second factor is credit utilization. Credit utilization accounts for 30% of your credit score and it is the amount of credit you are using compared to the amount of credit you have available. It is important to keep your credit utilization ratio low (less than 30%) in order to boost your credit score.
Credit Age
The third factor is credit age. Credit age accounts for 15% of your score and it is the length of time you have had credit accounts open. The longer you have had open accounts, the better your credit score will be.
Mix Of Credit
The fourth factor is credit mix. Credit mix accounts for 10% of your score and it is the types of credit accounts you have open. Having a mix of installment loans, credit cards, and other types of accounts can help your credit score.
New Credit
The fifth factor is new credit. New credit accounts for 10% of your score and it is the amount of new credit you have applied for recently. Too many inquiries or applications for new credit can lower your score.
In order to achieve a really good credit score, it is important to keep all of these factors in mind. Paying bills on time, keeping your credit utilization ratio low, having a good credit mix, and limiting new credit applications can all help you achieve a good credit score.
Final Thoughts
A good credit score is essential in today’s world. It can help you get approved for loans, credit cards, and even rental applications. A good credit score is generally considered to be a score of 670 or higher. The factors that help you achieve a good credit score are payment history, credit utilization, credit age, credit mix, and new credit. Keeping these factors in mind and taking steps to improve them can help you achieve a really good credit score.
