What is a “Good” Credit Score?
The highest possible credit score is eight hundred and fifty ( 850 ), that being said achieving this number is more about a series of unlikely occurrences rather then living a full life. A better question would be: How good of a credit score do I need to lower my interest rates?
According to FICO, which is the Fair Isaac Corporation better known as the creators of the credit scoring system, a credit score above a 760 is stellar. The average score in 2015 for people ages 25 to 34 was a 628, the average score for people ages 45 to 54 was 647, and the average score for those 55 and older was 697.
If you are concerned because your credit score is lower then 760, don’t be. A minimum score of 580 guarantees a FHA loan and far more lenders are starting to accept lower credit scores for more loans. Just be aware that the higher your credit score the less risk is seen when lending to you which can dramatically lower your interest rates.
It is important to maintain your credit score when you acquire any credit score. Being sure to prioritize your expenses and either increase your income to match these expenses. Also be sure to ascertain if there are any errors on your credit report, an individual is entitled to one free copy a year from annualcreditreport.com. Once you know of any outstanding loans that need to be dealt with it is important to contact your lenders and arrange a payment plan. Even one good faith payment can drastically improve any account status leading to a higher credit score. Once you set payment plans it is critically important to continue to pay these bills on time, this new trend will establish a precedent for your financial return. Once you obtain this new credit it is important to not tarnish it again.