What is Considered a Good Credit Score

Credit Scores

Your credit score may not be exactly the same between the three major credit reporting bureaus:

• Experian
• Equifax
• TransUnion

Creditors may rely on one credit reporting agency, a combination of a couple of them, or all three. Although the scores may vary slightly, the reporting agencies all take into account the same items:

• Outstanding balances
• Timeliness of payments
• The types of accounts on the report
• The amount of time the accounts have been open

Other items can be used to determine your credit score, but keep in mind that there are some things which have absolutely no bearing on your credit score whatsoever:

• The amount of money you have in the bank
• Your annual income
• The length of time you have been at your job

The three credit reporting agencies are concerned with how wisely you use the credit you have. Other factors – no matter how potentially positive to your financial standing they may be – are not considered when determining a credit score.

What is Considered a Good Credit Score for Borrowing Money?

Credit scores aren't only analyzed by potential lenders. Other entities, such as insurance companies and potential employers, sometimes use credit scores as a way to determine an applicant's suitability. If you're wondering what is considered a good credit score for lending, you can generally expect to encounter approvals for credit if your credit score falls within the 700 range. People with credit scores in the high 600's are also generally considered to have "good" credit scores, but a lot depends on the reason for the credit score inquiry.

For example, a mortgage lender may state that 720 is considered "good" but a credit card issuer catering to people with bad credit may consider 620 to be a "good" score.

So how do you know what is considered a good credit score in general? Most financial experts agree that in order to have the most buying power and receive offers for the lowest interest rates your credit score should fall at least above the 720 mark. Many creditors consider this to be a sufficient score to determine that there is not a very large credit risk associated with granting you credit.

Good versus Excellent

What is the different between a good credit score and an excellent credit score? While you can be fairly sure that a credit score of 720 will get you approved for loans and credit cards at attractive interest rates, a credit score of 760 will make you extremely attractive to potential lenders. People with this score usually have no problems with acquiring credit because they are considered among the top tier of people utilizing credit.

Your Credit Score

It's not difficult to find out if you have a good credit score or not. You may have to pay money to get access to your score, because the free annual credit reports list the items on your credit report but do not reveal your actual score.

Should you care what your credit score is? If you are always approved for credit and you keep up with your payments, then you can probably assume that your score is more than adequate, lumping you into the group of consumers who are considered to have good credit scores. Although you should check your credit report for errors periodically you may not have the same need to review your actual score.

For the most complete review of your credit score from all three major credit bureaus, go to the official FICO website and request a credit scoring analysis. The report you receive will not only reveal your credit scores but will also let you know whether your score is considered good, excellent, or something else entirely.