What is a Credit Score, and what are the Credit Score Ranges in 2021?
Credit Scores estimate your likelihood of repaying new debt. Scores of 690 or above are considered good credit.
The Credit Score Range
A credit score is a three-digit number, usually on a scale of 300 to 850, that estimates how likely you are to repay borrowed money and pay bills.
A higher credit score can give you access to more credit products — and at lower interest rates. Borrowers with scores above 750 or so frequently have many options, including the ability to qualify for 0% financing on cars and for credit cards with 0% introductory interest rates.
From NerdWallet
What Factors Affect Your Credit Score?
The two main credit scoring models, FICO and VantageScore, consider much the same factors but weight them slightly differently. For both scores, the two things that matter most are:
Paying bills on time.
How much you owe.
Where does your Credit Score Information come from?
The information on your credit accounts is stored by credit-reporting agencies, also called credit bureaus. The three largest are Equifax, Experian and TransUnion.
Reporting credit information is voluntary, and there are strict guidelines for how to do it. But creditors choose to do it because information about consumers' past credit habits helps them make better decisions about risk. Consumers do not have to give them permission to do this.
How Do You Monitor your Credit Score?
It’s important to know where you stand, so it pays to monitor your score. You can get a free credit score from a personal finance website such as NerdWallet, which offers a TransUnion VantageScore 3.0.
Remember that, like weight, scores fluctuate. A score is a snapshot, and the number can vary each time you check it. As long as you keep it in a healthy range, those variations won’t have an impact on your financial well-being.
Lenders Look At More Than Credit Scores
When you go to borrow money, a good credit score does not guarantee a good interest rate — or even approval. Nor does a lower score indicate you cannot get credit at all.
Your income and other debts play a key role in some lending decisions, as lenders consider what you owe alongside what you earn and assets you have accumulated. Lenders use a debt-to-income ratio calculation to evaluate whether you have room in your budget to repay a loan.