What Is A Good Credit Score?
A good credit score is a valuable asset that can improve your financial well-being. It is more than just a number; it's a gateway to various financial opportunities. It significantly impacts your ability to access loans, credit cards, and even rent an apartment.
With a high credit score, you're likely to secure lower interest rates and better terms on loans which will save you money in the long run. For example, a good score could mean you pay significantly less interest on a mortgage.
What Is a Good FICO Score?
The FICO® Score is one of the most widely used credit scoring models. It ranges from 300 to 850. A FICO score between 670 and 739 is considered “good.” If you have a score between 740 and 799, that is “very good” and if you manage to achieve a score of 800 or higher, then you are in the “excellent” range.
FICO also has industry-specific scores for credit card issuers and auto lenders, with a range of 250 to 900. However, even with these industry-specific scores, the “good” range is still 670 to 739.
What Is a Good VantageScore Credit Score?
VantageScore is another popular credit scoring model. Like FICO, it also uses a scale of 300 to 850. The most recent versions, VantageScore 3.0 and 4.0 consider a score between 661 and 780 as “good.”
Although both FICO and VantageScore are designed to predict the same thing, that is, the likelihood that a person will become 90 days past due on a bill within the next 24 months, they use slightly different calculations and can come up with different results.
What Affects Your Credit Scores?
Payment history: Late or missed payments can lower your credit score.
Credit usage: This factor looks at how much of your available credit you are using. Keeping your credit card balances low relative to your credit limits is important.
Length of credit history: A longer credit history usually results in a better credit score, as it shows lenders that you have experience managing credit.
Types of accounts: Having a mix of different types of credit accounts, such as credit cards, student loans, and mortgages, can positively impact your score.
Recent activity: Opening many new accounts in a short period can lower your score, and it's better to apply for new credit sparingly.
FICO Score Factors
FICO uses percentages to show how important each category is, but these percentages can vary depending on the specifics of your credit report. The most important factors, according to FICO, are:
Payment history (35%)
Amounts owed (30%)
Length of credit history (15%)
Credit mix (10%)
New credit (10%)
VantageScore Credit Score Factors
VantageScore lists factors by their general influence on your credit score. The most influential factors are:
Payment history is extremely influential.
Total credit usage is highly influential.
Credit mix and experience are highly influential.
New accounts opened are moderately influential.
Balances and available credit are less influential.
What Kind of Information is NOT Considered
Where you live, including your current and previous addresses.
Demographics and beliefs, like your age, race, religion, and gender. These are legally prohibited from being considered.
Income and employment details, although lenders might consider these when making lending decisions.
Soft inquiries, which are records of when your credit is checked for non-lending purposes.
What Can Negatively Impact Your Credit?
Applying for credit too often can hurt your credit score; it can lead to hard inquiries that can temporarily lower your score
Late or missing payments, even by just 30 days, can have a significant negative effect.
Debt charge-offs and collections, which occur when an account is unpaid for a long time and sent to a collection agency, can have a significant impact on your credit score.
Closing old accounts can impact your credit history and utilization ratio.
Voluntary surrender or repossession of collateral for a loan.
Filing for bankruptcy can have a significant negative impact that may last for years.
Repair Credit with AMERICA CREDIT CARE
If you are struggling with a low credit score and inaccurate negative information in your credit report, AMERICA CREDIT CARE’S credit repair services can help you address inaccurate negative items on your credit report.
Our experts can assist you in disputing inaccurate items and working towards improving your credit score.
What Is a Good Credit Score to Buy a House?
Most mortgage lenders want to see a credit score in the "good" range or higher. A FICO Score of at least 670 is a good target if you want to buy a house. While it is possible to get a mortgage with a lower score, the terms might not be as favorable. Many lenders require a minimum score of 620 for a conventional mortgage. For government-backed mortgages, the minimums vary:
FHA loans: 500 - 579 with a 10% down payment or 580+ with a 3.5% down payment
USDA loans: 580 - 620 may be required by lenders
VA loans: 620+ is generally required by lenders
Remember, a better score often means a lower interest rate and better payment terms. For example, a FICO score of 700 instead of 620 can save you almost $50,000 over the life of a $350,000 30-year mortgage.
What Is a Good Credit Score to Buy a Car?
Similar to buying a house, your credit score impacts your ability to get favorable rates on a car loan.
While it is possible to secure an auto loan with a wide range of credit scores, a score of 661 or higher on the VantageScore scale is generally considered good.
As with mortgages, a better score will usually result in lower interest rates and more favorable loan terms.
A score of 700 or higher will improve your chances of getting a good rate, and a score of 770 would be considered very good and likely qualify you for a low APR loan.
Why There Are Different Credit Scores
Credit scoring companies are constantly updating and selling their scores to lenders. Lenders choose which model to use based on their specific requirements.
FICO and VantageScore both create and sell various credit scoring models, and each company releases new versions periodically These new versions can incorporate technology advances and changes in consumer behavior.
Experian Boost: Includes on-time payments for utilities, rent, and streaming services.
Third-Party Services: Some companies can report your rent and utility payments to the credit bureaus.
Including these payments can give your credit score a quick boost, especially if you consistently pay on time.
#11. Challenge Credit Report Errors
Credit reports can have errors that could lower your score for no good reason. Review your reports, and if you find any errors, consider challenging them.
Errors can include unrecognized accounts, incorrect public records, inaccurate loan statuses, closed accounts, duplicate accounts, etc.
During the dispute process, you can contact credit bureaus online or by certified mail. If you want help with this process, credit repair services like AMERICA CREDIT CARE can help you file disputes.
Can Paying Off A Loan Or Collection Account Hurt My Credit Score?
Yes, paying off a loan can sometimes temporarily decrease your credit score. This can happen because it closes the account, potentially shortening your average credit age, and reducing the diversity of your credit mix.
Similarly, paying off a collection account may not improve your score if the collection remains on your report, though some newer scoring models now treat paid collections more favorably.
The benefit of paying off a loan early, such as lower interest, often outweighs the potential temporary negative impact on your credit score.
How Long Do Negative Credit Items Typically Persist?
Negative items on a credit report can remain for several years, but their impact on your credit score lessens over time. Here's a breakdown of how long different types of negative items typically persist:
Missed payments can remain on your credit report for seven years. Although the impact of older late payments lessens over time, the further in the past they are, the less they will affect your score.
Accounts sent to collections can also remain on your credit report for up to seven years, and paying off the account will not remove it from your credit report. However, newer FICO scoring models may ignore paid collection accounts and medical debt and collection accounts under $100.
Hard inquiries will remain on your credit report for two years. But, they usually hurt your credit for a period of one year after they are initiated.
Bankruptcies can stay on your credit report for up to 10 years.
Charge-offs can remain on your credit report for up to seven years.
It's important to note that while negative items remain on your credit report for an extended period, their influence on your credit reduces over time. The more recent the negative item, the more it will affect your score.
Here are some estimates of credit score recovery time after various events, for people with an average credit score:
3 months–hard credit inquiry
3 months–high credit utilization
9 months–mortgage payment that’s 30 to 90 days late
18 months–a payment you completely miss
3 years–a mortgage foreclosure
6+ years–a bankruptcy filing
It can take 30 to 45 days to see the impact of positive actions on your credit report. This means that paying down a credit card balance in January should typically appear on your credit reports by the end of February.
We have many years of experience in evaluating credit and guiding consumers to assert their legal rights. We do it every day! We guarantee honesty and dependability, virtues which most people seem to have forgotten.
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We have many years of experience in evaluating credit and guiding consumers to assert their legal rights. We do it every day! We guarantee honesty and dependability, virtues which most people seem to have forgotten.
Copyright © 2025 America Credit Care. All rights reserved. Powered by WebbArtt Solutions