A Credit Score is a portrait of someone’s credit history made up of several factors. Now, this number is placed on a scale that helps prospective lenders check how likely you are to pay your debts. This in turn returns what kinds of loans you can get. There are five factors that determine your credit score. They all have various levels of importance.
One of the factors is payment history. It is the most piece of your credit profile and it accounts for roughly 35% of your score. There are a lot of benefits available for maintaining a good credit score. Down below are few benefits of having a good credit card that are mentioned.
What can be a great credit score?
Most credit scores use a range between 300 and 900 and the score of 700 and up is a good credit score. Now, within that range, there are different categories from bad to excellent. Excellent credit is most often defined as a 750 and up. Whereas, a good credit score is somewhere between 700 and 749. A fair credit score is between 650 and 699. Poor credit has a range of 600 to 649. The last and least bad credit is defined as a score of 599 or below.
Benefits of maintaining a good credit score
1.Much more likely to be approved: When you apply for new credit and you show a score of 800, they will treat you. Though taking on too many new accounts in too little a time frame will impact your effect on the score. So, make sure you are spacing out new accounts
2. Payless Interest: Interest rates are going to follow you anytime you borrow money. But the rate that you pay is going to be different depending on your credit score. If you have a good credit score, then you will get better interest rates on any money that you take out. Someone with a good credit score is going to qualify for better rates or even the best possible rates. They are going to have lower charges when it comes to taking out loans of any kind.
3. Get better credit cards You have seen all the ads for those great credit cards, the ones that advertise all that money back and the lowest rates and the best rewards. Well, those are credit cards that you need to have a specific credit score to get. If you do not have a good credit score you are not going to get the card. If you have good credit, you could get lower interests, fewer fees, better rewards, and even higher credit limits.
FAQ
Q1. Why are credit scores important?
Ans- Your credit score is a snapshot of a specific moment in time, but can and will change with new actions and the passage of time.
Q2. What is the range of credit score?
Ans- The range of credit score is from 300 to 900. Here 300 credit score is considered to the lowest. A credit score above 800 is considered to be an excellent credit score.