You should check your credit regularly, so that you know where you stand in terms of the likelihood a potential creditor will be willing to extend you credit. Your credit score is one of the most important numbers of your life. It’s important like your phone number, your bank account balance, or your social security number. Creditors and lenders will check your credit score to decide whether to approve your application.
Getting Your Credit Score
You can order your credit score from a variety of sources. First, you can check your credit score for free through one of these services: CreditKarma.com, CreditSesame.com, Quizzle.com, WalletHub.com, and LendingTree.com. You can also purchase your credit score from any of the major credit bureaus – Equifax, Experian, and TransUnion – or through myFICO.com.
What It Means
Credit scores are a three-digit number, often ranging from 300 to 850, with 300 being the lowest credit score you can have and 850 being the highest possible credit score. The higher your credit score is on the scale, the better your credit is. Some credit scoring models may use a slightly different range, but higher scores will always be better than lower ones. In general, credit scores fall on the following range:
- Above 750: excellent credit
- 700–750: very good credit
- 650-700: good credit
- 600-650: bad
- Below 600: very bad
High credit scores mean that you’ve typically done a good job of managing your credit in the past. You’ve managed your credit accounts well, kept your balances at a manageable level, you’ve made your payments on time, and you’ve avoided major credit blunders. With a high credit score, you’re more likely to have your credit card and loan applications approved and for the most favorable terms.
On the other hand, low credit scores indicate that you’ve had trouble managing credit in the past. You may have racked up high credit card balances, borrowed more than you could afford to pay, missed several payments, or possibly have had a foreclosure or repossession. A low credit score makes it more difficult to get approved for credit cards and loans. When you are approved, you may have a higher interest rate.