18 Jun What Credit Score Is Considered Excellent?
Credit scores considered excellent are anything from the 610-800 range. Below that, lenders and creditors will usually deem you high risk, or at least unworthy of their best loan and credit term offerings. Having a high credit score is great for your reputation– landlords and employers alike assess your credit to determine whether you’re a responsible prospect.
They use your payment history and address history to assess whether you’re financially stable and good at sticking to agreements. You can get a free credit report online using Credit Boost’s free credit checker.
Credit Scores from Good to Excellent
Different bureaus have different scoring ranges, but in general, a good credit score is anything from 610 to 800 and above. A credit score of 800 and above is considered to be excellent.
Experion, a Big Three credit bureau that operates globally, says that a good credit score is between 670 and 739. They create different kinds of consumer and industry-specific credit scores.
A good VantageScore, used by Experion, Equifax, and Transunion, ranges anywhere from 661 to 780. Their newest scoring models VantageScore 3.0 and 4.0 range from 300 to 850. Most lenders depend on a score of at least 620 to consider you for a mortgage.
What Makes Good Credit Scores?
VantageScore and FICO use different scoring models and therefore have different formulae they use to calculate credit scores. However, a lot of the time your FICO score won’t differ too greatly from your VantageScore because they take congruent factors into account. Factors comprising both models include payment history, utilisation ratio, age of accounts, and diverse lines of credit.
A Crash Course in Credit Scoring
Payment history, like whether you have defaulted, paid on time, have derogatory marks, and the like are important because they are the biggest indication of whether you are trustworthy and responsible with credit to lenders and bureaus. If you have accounts in collections, have been in debt review, or don’t pay on time, lenders are unlikely to lend you money because you likely won’t pay them back, either.
Credit utilisation ratio is how much credit or money you have spent compared to your credit limit. For example, if you have a R1000 credit limit and spend R200, your credit utilisation ratio is 20%. This is important because it tells lenders that you don’t spend more than what you can pay back at one time.
The age of your accounts, or how long your credit history is, is also a deciding factor in your credit score. This is because the length of your history shows how much experience you have with handling credit, which adds, wait for it…credibility to your history (you chuckle, I smile charmingly).
Lastly, the number of credit lines you have, especially differing lines of credit (like store accounts, personal loans, mortgages, auto loans, credit cards, etc.) matter, because it shows you have experience handling a variety of credit types. This again shows you’re responsible.
To reiterate: a good credit score is anywhere in the range between 610 and 850 and is determined by your behaviour with credit and the responsibility you show. Scores vary from bureau to bureau because of different scoring models, but not by too much.
If you would like to check your credit, be sure to use Credit Boost’s free online credit checker. It’s safe, free, and you’ll have your score in minutes.