When it comes to your money, your credit score is one little number that says a lot about not only your past credit history, but also what’s to come when and if you want to borrow money in the future. What is a good credit score, exactly, though? Read on to find out!
What is a Credit Score?
Your credit score is three-digit number between 300 and 850 assigned to you by the major credit bureaus that can help lenders get an idea of how credit-worthy you are, meaning essentially that it’s a numerical value that measures how likely (or unlikely) you are to pay back money you owe to lenders. Credit scores are used by almost all major lenders to decide who is worthy of a loan or line of credit and who isn’t.
How is Your Credit Score Figured?
Your credit score is calculated based on several factors, including:
- Payment history (were all payments made on time?)
- Length of credit history
- How many accounts you have open
- Types of accounts you have open
- How much available revolving credit you have
What is a Good Credit Score?
This is a somewhat subjective question depending on the lender asking about your credit score and which credit bureau is reporting the score, but generally speaking, a good credit score falls between 670 and 739. A score in that range or higher is generally a good indicator to lenders that you will pay back money that you borrow from them.
Does Your Credit Score Really Matter?
The simple answer is that if you intend to borrow money at any point, then yes, your credit score is important. Be sure you check your score frequently to catch any inaccuracies and watch how changes in your credit report affect your score.