A credit score is a number between 300-850 that demonstrates your creditworthiness. Basically, your credit score is the number that lets lenders know whether you are a good candidate for borrowing credit and the rates at which you will be able to borrow.
Your credit score affects much of your financial life so it is important to learn how to maintain good credit. If you have bad credit, do not give up. You can still learn how to fix your credit ASAP.
Your credit score tells lenders whether they should let you borrow money for many important things, including opening credit cards, buying a house, renting an apartment, and leasing a car. The most common credit score model was created by Fair Isaac Corporation, which is commonly known as FICO. The FICO system ranks your credit on a scale of 300-850.
The higher your credit score is, the better you look to lenders. Here is a breakdown of the FICO credit score ranking system.
- Excellent: 800 to 850
- Very Good: 740 to 799
- Good: 670 to 739
- Fair: 580 to 669
- Poor: 300 to 579
In order to find out your credit score you will need to do a credit score check.
You can do this quickly for free by requesting a credit report through websites like Credit Karma or you can request an official report online via the Annual Credit Report Request Service. You can also call them over the phone at 1-877-322-8228.
Do not beat yourself up if you have a poor credit score. Many people do not learn about credit until they have already made choices that have lowered their credit scores. However, if you have good credit it will be much easier to reach major financial milestones, such as buying your first home or leasing a vehicle. If you have a low credit score it is important to take steps to improve it.
You can still repair your credit, discover what it takes to raise your credit score.