Whether you’re looking to buy a house, refinance a loan, or simply manage your finances more effectively, knowing what a good credit score is is crucial. This article delves into the components of credit scores and explains the numbers that can be considered “good” in the lending business.
Components of a Good Credit Score
Credit scores in the United States typically range from 300 to 850. They are calculated based on factors such as payment history, credit utilization, length of credit history, types of credit used, and recent credit inquiries. The FICO score and VantageScore are two main types of credit scores, each considering similar factors but with different weightings.
How Good Is a Credit Score of 715?
A good credit score, according to the Fair Isaac Corporation, starts at 670. Scores between 670 and 739 are “good,” 740 to 799 are “very good,” and 800 and above are “exceptional.” Thus, an example score of 715 falls into the “good” category, which affects borrowing terms, interest rates, and credit product availability.
Strategies for Maintaining Good Credit Scores
Maintaining or achieving a good credit score involves paying bills on time, keeping credit balances low relative to the credit limit, and avoiding unnecessary credit inquiries. Regular credit report monitoring is crucial for tracking progress and disputing inaccuracies.
In Conclusion
To recap, the spectrum of what is considered a good credit score according to FICO starts with 670 and ends at 799. Having a score in this range is considered good and opens up a range of financial products and favorable terms. This score facilitates better borrowing options, including mortgages and refinancing opportunities, and offers advantages in real estate transactions. Maintaining or improving to this level is crucial for financial leverage, especially in high-cost areas like California.