Repair Credit Score

Posts Tagged ‘what is a good credit score’

Before you learn how to repair your credit, you should know what is a good Credit Score and what types of Credit Report activities lead to good Credit Score. Credit scores can range from 300 to 850. Whether a Credit Score is a good Credit Score actually depends on what you are doing with your Credit Score. For example a good Credit Score for buying a house is not the same as a good Credit Score for renting an apartment or buying a car. Lenders often set their own standard of what a good Credit Score is. However, in general you can follow the rules below when deciding what is a good Credit Score.

A good Credit Score vs a Good Credit Report

Usually the more expensive the item you want to finance is, the better the credit score you have to have. While lenders will pay attention to the Credit Report, the credit score is a easy to judge number that is easier to read and approve or decline your application based on.

Most lenders will have a computer algorithm or mathematical formula that will red flag and decline the applicant with credit scores lower than a certain score that is preset.

What is a good credit score?

While lenders have different definitions of what a good credit score is, in general, credit scores above 700 are considered definitely good or very good credit score. If your credit score is between 600 and 700, your credit score is generally considered above average. The closer your credit score is to 700, the more the lender is willing to lend.

Another factor that affects the definition of a good credit score is what the credit scores of the majority of the people are. When the economy is good, a large percentage of the population have credit scores in the 800 range and credit scores above 700 are common. When the economy is bad, more people ruin their credit and it is hard for lenders to find people to lend with good credit. In this case, lower credit scores such as around 600 can be considered good credit scores.

Lending based on Credit Report vs.. credit score

While credit score is usually calculated based on the items on your Credit Report, a lender who goes solely by the credit score will be less likely to lend you if your credit is poor whereas a lender who is willing to look at the Credit Report can generally tell if you have been working on improving your credit and is therefore more likely to lend you.

When you are repairing your credit, sometimes you can convince the lender to lend you based on the improvement of your Credit Report. However, while you are repairing your Credit Report, your credit score is not likely to have improved enough for your credit to be considered good.