Credit Scores

Credit checks are happening now more than ever. Credit checks are not just to see if you qualify to borrow money. To sign-up for utilities, buy a cell phone, or rent an apartment, a credit check is usually done. Even employers can check your credit scores before hiring. Having good credit is now more important than ever. So what is a good credit score? Let’s break it down into three categories:

Very good and excellent credit scores: mid 700s and above

People with high credit scores are most likely to be approved for loans and credit cards with low interest rates and good repayment terms. But having very good or excellent credit scores doesn’t mean you’re automatically qualified for every loan or credit card out there. A lender could deny an application for another reason, like a high debt-to-income ratio, so it’s important to not carry unnecessary debt.

Fair to good credit scores: Low 600s to mid 700s

While you’re comparing your options, know that applying for a new loan or credit card may result in a hard inquiry, which can have a negative impact on your scores. Loans with preapproval or prequalification options can give you an idea of the terms you might qualify for ahead of time. 

Poor credit scores: 300 to low 600s

Having a poor credit score can make it difficult to get approved for a loan or credit card. A poor credit score is not final. Luckily, it’s never too late to improve your credit. Sign up for RentPlus and start building credit simply by paying your rent. RentPlus will report on-time payments to a credit bureau and will help improve your credit score without having a mortgage. Also, many credit-building products, like secured credit cards, can be obtained even if you have poor or limited credit. 

Some benefits of having good credit are: larger loan allowances and higher credit limits, lower auto insurance premiums, easy approval for most credit products, low interest rates on loans and credit cards, and lower or waived deposits for rentals and utilities. Whether your credit score is poor or good, pay your bills on time, keep your card balances low, and your credit will improve over time.