Learn About Credit Scores

If you do not understand credit scores, you may be unfamiliar with ways to raise your score. A credit score is a three-digit number that can decide whether you qualify for certain types of financing.

Anyone with a credit history has a credit score, and scores vary widely among consumers. Generally, credit scores range between 300 and 850, and understandably, people with higher scores have more financing options available to them. However, while a low score may stop a credit application today, raising your score can create new opportunities in the future.

What is a Good Credit Score?

credit scoresA common question asked by consumers is, what is a good credit score.” While a healthy credit score range is 680 or higher, this can vary from lender to lender. For example, if applying for a mortgage loan, one lender may happily approve qualified applicants with a credit score 680 or higher, whereas another lender only approves applicants with a score 720 or higher.


A good credit score really depends on the type of financing and the individual lender. For this reason, it’s important to maintain the highest score possible. This increases your odds of acquiring financing regardless of the lender. However, reviewing a credit score chart can provide an indication of your category.

760 – 850 = excellent credit
700 – 759 = great credit
660 – 699 = good credit
620 – 659 = fair credit
580 – 619 = poor credit
580 and below = very poor

What Influences Your Credit Score?

credit scores

If you want to raise your personal score, it pays to understand the factors that affect your credit. A credit score chart can provides clues about factors that influence your credit. According to Myfico.com, your payment record and the amount you owe your creditors have the biggest influence on your credit score, 35% and 30% respectively. The length of your credit history makes up 15% of your credit score, the type of credit makes up 10% of your credit score and new accounts make up 10% of your credit score.

How to Obtain Your Credit Score

Some consumers pay little attention to their credit or their credit score, but if you plan on applying for financing, you need to know where you stand. Your credit reports are readily available to you for free from annualcreditreport.com, as well as paid credit monitoring services.

You may have read advertisements for free credit scores. However, there is a fee to order your personal score. Nonetheless, many companies that offer credit report monitoring do give free credit scores to people who sign up for a trial subscription. This is an excellent way to obtain your credit score free, and you can always cancel the subscription before the company bills your credit card.

Ways to Improve Credit Scores

Raising your credit score takes work and determination. This isn’t something that you can do overnight. On average, it takes about six months or longer to improve a low score. But don’t let this discourage you.

Start by paying all your creditors on time each month. Remember, it only takes a couple of late payments on your credit report to drive down your score. If you have difficulty remembering due dates, set reminders on your computer or phone, or sign up for automated payments. Also, keep your debt balance to a minimum. The less you owe, the better your credit scores. Charge only what you can pay off in a month.

Maintain a variety of credit accounts to add points to your score, such as a credit card, an auto loan or a mortgage. And don’t apply for new accounts unnecessarily. Decline in-store offers for credit cards, and if you rate shop for a mortgage or auto loan, complete all your applications within a 30-day period.

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