What’s a good credit score? Do I have a good score? And, if not, how do I get one?
There are so many misconceptions around credit, it can be tricky to figure out if you’re in hot water or floatin’ along just fine.
Our finance editors broke down the need-to-know basics of credit in an easy-to-digest FAQ format, so you can finally figure out not only how you measure up, but how to improve your credit.
Here’s everything you need to know:
First off, what is a credit score?
Generally, a credit score is a number between 300 - 850 that identifies a consumer’s trustworthiness when it comes to paying back loans. Anyone who uses credit has one.
In most cases, the higher the score, the more likely you’re considered to be able to pay back a loan - and the more likely you are to get approved for a loan.
The score fluctuates based on your credit history; that encompasses everything from whether you pay your credit card bill each month, to how many cards, car loans, and mortgage loans you have.
Your payment history makes up roughly 35% of your credit score - if you have a history of paying back loans on time, it’s likely you’ll have a better score.. However, if you have a history of not paying back loans on time, your credit score can take a hit.
What’s a “good” credit score?
Poor: 300 - 579
Fair: 580 - 669
Good: 670 - 739
Very Good: 740 - 799
Excellent: 800 - 850
Having a good, very good, or excellent credit score can open financial doors for you.
Although it depends on the market, if you’re looking to buy a home, 620 is considered the minimum score you need to get a mortgage.
What happens if I have a “bad” credit score?
If you have a lower score, you risk not securing approval for that much-needed loan or losing thousands in higher interest rates over time.
How do I find my credit score?
There are a few places you can find your credit score easily and for free, including multiple secure credit monitoring apps. It’s very possible that your bank offers a free credit score monitoring tool.
If you want to check your credit report, which is a comprehensive history of your credit over the years, you are entitled to one free copy of your credit report from each of the bureaus annually.
If you are having trouble making sense of your credit report or score, you can check out Lexington Law for a free credit score, credit report summary, and credit repair recommendation.
I’ve never defaulted on a loan - why isn’t my credit score “good”?
There’s a possibility that you missed a payment, you made a late payment, or there are outdated or incorrect items on your report.
In 2021, 34% of consumers reported finding at least one mistake in their credit report! It could be as innocuous as the wrong address or as dangerous as an unrecognizable account. This is why it’s important to do more than just check your score once and forget about it.
How do I improve my credit score?
If you’re looking to improve your credit - which will only continue to benefit you - head over to Lexington Law. Their website makes it incredibly easy to sign up. So you’ll soon have an advocate in your corner to defend your name and push your credit where it needs to be.
They help you address inaccurate items on your credit reports, by assisting you with disputing or challenging items. Plus, they make recommendations on actions to take to improve your credit that you’d never thought of. There are even specific credit cards recommended if you’re looking to restore bad credit! Lexington Law knows that each individual's financial situation is unique, so their methods are never a one-size-fits-all solution.
The first step to improving your credit score is finding out what it is, so we recommend Lexington Law’s all-inclusive package. Once you receive your summary, the next step is letting them help you work to raise your score!
Although credit scores seem out of your control, they’re not as tough to build as you might imagine them to be.
So, take the next step toward better credit and check out Lexington Law today!
Lexington Law is offering our readers a free credit repair consultation, which includes your FREE credit report summary and score. You can follow this link, or call 1-833-335-5239 to take advantage of this no-obligation offer.