What’s Considered Good Credit?
How Healthy Is Your Credit?
The simple fact is most Americans are aware of how important having good credit is, but few really understand what is considered to be “Good Credit”. Perhaps the easiest way to determine the health of your credit is to order a credit report from each of the three main credit reporting agencies, TransUnion, Equifax, and Experian. These reports will show you what your credit score is in a numerical representation between 300 and 850. This number is based on a very complex mathematical analysis that incorporates details such as your payment history, your debt load, any liens or judgements, and a variety of other statistical details.
Each of these agencies uses different methods of calculating your credit score, which explains why their numbers vary. However, they gather the same basic information from landlords, lenders, employers, and various other sources to calculate your final credit score. Because each company uses a different method, it is quite possible for you to have three completely different credit scores.
A Simple Three Digit Number
As stated, your credit score is presented as a three digit number and as long as you have a good idea of your score, you should have a good idea of how lenders, insurance companies, and employers are likely to see your credit worthiness. Use the following to get a good idea of the various credit scores and what they mean:
- Above 740: A credit score of above 740 is considered to be “excellent” and typically means you have a long credit history that has no late payments, liens, judgements, or collections. It also means you have established a range of different types of credit, all of which have always remained in good standing.
- 680 to 740: A credit score in this range is considered to be “good” and also symbolizes you have a long established history of excellent credit management. The only reason you are rated below 740 is that you may have a high debt to income ratio.
- 620 to 680: A credit score in this range indicates that you have worked hard to maintain your credit, but may have a missed payment or two in you history. You may even have had a collection or two, but have paid them off. You will still get good rates on a loan but are likely to pay higher rates than those in the 680 to 740 plus range.
- 550 to 620: A credit score in this range is considered “poor” and may indicate a few small problems such as late payment, collections, or an older public debt in your credit history. Your rates will be higher as you are considered a riskier borrower.
Anything below 620 indicates poor or very poor credit and shows that you have had numerous credit problems in your history. Scores in this range can make finding a loan very challenging but not impossible to obtain. However, at
New Smyrna Beach Chevrolet our Finance Team works with many lenders and will help you secure the loan needed for a new or used vehicle. Bear in mind that you should be prepared to pay higher interest rates.
Making It Better
Even if you have bad credit, all is not lost as you can repair your credit, it just takes time and effort. You will need to make a few adjustments to the way you deal with your credit. Pay off any collections accounts you may have, make all of your payments on time, reduce your debt to income ratio, avoid applying for loans, and don’t take on any additional debt until your score improves significantly.
If you’re in the market for a new or used vehicle, visit
New Smyrna Beach Chevrolet to discuss your financing options. Whether you have excellent credit or poor credit, we are willing to work with you to find the best available loan that works for you and your family.
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