In today 's current economy, its much harder to qualify for a loan. Now you need a very good credit score to qualify for most types of credit. So what 's a good credit score rating?
850 is perfect credit and the highest credit score rating possible, though I 've never personally seen anyone with an 850. A good credit score starts in the 670 range. Scores lower than 670 are not considered good credit.
How to Get a Good Credit Score:
There are 5 criteria that your credit is scored upon, and they 're rather simple to follow.
1. Payment History accounts for 35% of your credit score.
Do you pay your bills on time? If you do nothing else but make timely payments, you will have a good credit score in two years. Obviously, avoiding new collections, court actions, and most easily late pays will help your credit.
Past delinquency plays the largest role in hurting your credit score. One recent 30 day late payment will lower your credit score, most likely by 20 points! A couple of late payments, and your score will drop very far, very fast. 60 day lates
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The credit scoring model likes to see that you have a variety of types of credit in your file. The very best placement of credit is to have a loan on a home, a car payment and a few credit cards. This credit is spread across different types of lenders and type of credit extended to you. There are a few types of credit to stay away from. Payday loans are very bad places to have credit with and your scores take a hit for having these types of high risk loans. Other very bad types of credit are the offers that allow you to have no payments for a year. These are dangerous, because the terms of the agreement may include that if you do not pay the loan off in a year, on day 366 you will owe the entire years worth of payments at typically 20% interest. This is a disaster waiting to happen. People who repeatedly go for these offers, are people who get into credit trouble. You should not have that kind of credit on