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25 Oct

What You Need to Know About Credit Scores

What You Need to Know About Credit Scores

Many Americans never think about their credit score until they need to take out a loan, but as consumers we need to be cultivating our creditworthiness long before we need one. So, let’s start at the beginning – here’s what you need to know about credit scores.

What is a Credit Score?

A credit score is a numbered representation of your creditworthiness based on a few various factors like amount of debt and payment history.

Lenders will use your credit score to determine how much they are willing to lend to you and at what interest rate. Your credit score is basically a way for lenders to see how likely it is that you will be able to pay them back the money you borrowed.

Why Does it Matter?

The lower the score, the less “creditworthy” you are to lenders.

It may be harder for you to get approved for a loan, and lenders are more likely to hike up your interest rates and restrict loan terms. With a low credit score, you may end up paying more in interest over the course of a loan term than you would with a higher score.

Is My Credit Score Good?

Credit scores range from 300 to 850. A number between 300 and 619 is considered bad. Average is from 620 to 689, good is from 690 to 719, and excellent credit is from 720 to 850.

Our Top Resources for Monitoring Your Score

We recommend reviewing the resources below to monitor your score.

  1. Credit.com
  2. CreditKarma.com
  3. MyFICO.com

Have questions about your score? Speak with one of our loan officers today – give us a call!