Your credit score is a three-digit number that estimates how likely you are to repay borrowed money and pay bills.
A good credit score can help you get approved for attractive rates and terms when you apply for a loan. But stating whether or not a particular credit score is good is complicated. That’s because the threshold for what’s considered good can vary based on the type of loan you’re applying for and which lender is reviewing your information. Throw into the mix different lenders using different credit scoring models, and you’re likely to end up with scores depending on which method was used.
When you apply for new credit, you’re not told what that particular lender’s exact cutoff point is between a good credit score and a bad one. That’s because lenders generally don’t reveal their credit score thresholds to the public. Yet FICO, the most widely known credit scoring model, shares some helpful information borrowers can use as a guide. The most common FICO scores feature a scale of 300 to 850. On that scale, a credit score between 670 and 739 is generally considered “good.”
Why are my scores different?
There are two companies that dominate the credit scoring model- FICO 8 and Vantage 3.0. While both reports pull from the same data they weigh the information slightly different and the reason your score could vary each time its checked. Its always a good idea to know which bureau the lender is pull from as well as which scoring model. Most lenders will use the FICO scoring model.
Most free credit monitoring apps provided your Vantage score. However, they move on a tandem so if you have Excellent Vantage score your FICO score is likely to be good as well.
Good credit makes it easier to get
-New houses
-New Cars
-Low interest rates on credit cards and loans
-Higher limits
-Contracts without security deposits
Ultimately, a good credit score opens up possibilities to create the lifestyle you desire.
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