What is a good credit score? The answer to that question really depends on a few factors, which we will address here.
The main factor that determines what a good credit score is really comes down to what you plan to use your credit to secure. If you are trying to secure a home loan at the most advantageous rate, a good credit score may differ from what it may be when you are applying for a store credit card.
So what is a good credit score? Generally speaking, a good credit score is anything above 680. Now when we talk about credit score, it is important to understand exactly what we are talking about. When your credit is pulled to secure a home loan, for example, the lender is going to pull what is called a tri merge credit report. This may sound fancy, but all it means is that you have all three credit bureaus reporting information and all three credit bureaus scores included in one report.
So when asking what is a good credit score, you need to understand that you actually don’t have one credit score, but three credit scores. Additionally, it is rare to have any of the three scores match. They may be similar numbers, but someone with a 680 credit score most likely does not have a 680 from each of the three bureaus!
When looking at your credit scores, the lender is going to take your middle score and assign that number as your credit score. Now we are not talking about the second score of the three, but rather the number that falls between the other two on a number line. So, if your three scores are 662, 694 and 680, your middle score would be the 680.
This is important to remember. If you are asking what is a good credit score and simply take the first score you see, in this case 662, you are going to have the wrong information. That is why it is important, when managing your credit, to look at reports from all of the bureaus. If you only see a single bureau report, it may be great and factual, but if the other two bureaus are reporting errors and your score suffers from it, you won’t know until you need to use your credit.
So back to what is a good credit score. With a 680 credit score, you can qualify for most loans at advantageous terms. You may not secure the best terms, reserved for excellent credit scores, but you will typically be able to secure market terms that are widely available.
To put this 680 number in perspective, it is important to note that the credit score range is typically from 300 to 850. If your credit is below 500, it is considered downright terrible. Likely you are going to have major issues if you want to borrow. If your credit score is above 740, on the other hand, your credit is considered excellent, and you should be able to secure the best terms on most loan products.
If your credit ranges between 500 and 680, there are a lot of different shades your credit takes, depending on what kind of credit you want to obtain. If you fall in this range, you likely have some options available that can help improve your score so that when you need to use credit, you can secure better terms. If you fall into this window, you could benefit from our free report, 3 free credit tips. Go download it now!
If you don’t know your credit score, use the form above to access a full tri-merge credit report with scores. Once you know your score and what is on your credit report, you will then be better able to manage it for your benefit.
