What is considered GOOD CREDIT SCORE
At present 850 is considered to be a good credit score number. Your credit score is like a report card which gives the potential lenders and creditors an overview of the risk attached with you from a numerical measure known as the credit score.Very few people have this credit score.The highest possible credit score represents that your creditworthiness is extremely good,you have been very responsible towards your payments and have managed your finances very wisely.Your credit score has a direct impact on your ability as a borrower in terms of getting a loan,buying a car,employment,insurance etc.
At present 850 is considered to be a good credit score number. Your credit score is like a report card which gives the potential lenders and creditors an overview of the risk attached with you from a numerical measure known as the credit score.Very few people have this credit score.The highest possible credit score represents that your creditworthiness is extremely good,you have been very responsible towards your payments and have managed your finances very wisely.Your credit score has a direct impact on your ability as a borrower in terms of getting a loan,buying a car,employment,insurance etc.
In order to a good credit score number you need
to understand what makes up a credit score and what steps you can take to raise
it to a higher level
Your payment history-35%
This is one of the most important elements used in
calculating your credit score.It indicates how regular you have been in the
past in paying your bills on time.If your payment history has been clear and
very regular ,your credit score will definitely be high and positive.
Your credit utilization ratio-30%
Another important component considered for determining your
credit score.The utilization ratio shows the relationship between the credit
that is available to you and the amount of credit that has been availed by you.
When you excessively use your available credit limit it means that you are
short of funds and are financially stressed. If you want your credit score to
be towards the highest range, the percentage of usage of credit limit should be
kept to a very low level below 20 percent of your credit limit. In other words,
the credit retaining ability should be higher than the credit usage ability.
Length of your credit history-15%
The length of your credit history another major component
indicates the duration of your credit card usage and the length of time you
have been regularly making your payments on time.
New credit -10%
An important element for determining your credit score. When
planning to restore your credit score, New credit can be used as a very clever
tactic as part of your credit score improving plan. if
you are Opening too many new accounts
and if there a lot of inquiries by
lenders ,it can bring down your credit
score drastically.
Types of credit used-10%
Another important element that determines your credit score.
Try to keep a mix of revolving and other credit and keep a lower percentage of usage of revolving
credit- Below 10%.
Having 850 the
highest possible credit score as your credit score will definitely put you as a borrower in the
superior bracket for the lenders. This high score can give many benefits to you
as a borrower such as lower rates of interest on loans and at very attractive
terms,Insurance be it home or car insurance-A good credit score number increases your
chances of being insured, job opportunity-Your good credit score number reflects how well
you manage your finances and this is considered as a basis for employment by
employers as it shows to them that you will very efficiently shoulder the responsibilities
of your job.
To sum it up, 850 is considered to be a very good credit score number and you can
have it as your credit score by lowering balances on your outstandings, putting
a stop to too many inquiries pertaining
to your credit history, making payments of all your bills on time and having
credit history of a longer duration.
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