Almost 1 in 5 Americans (17%) saw their credit scores drop during Covid.
This statistic isn’t too shocking considering the financial impact of the pandemic. What is surprising, though, is that average scores hit a new all-time high during the same period.
When’s the last time you checked out your score? It’s understandable to feel anxious. A lack of knowledge might be the source of your stress, though. After all, do you know if you have a ‘good’ score or not?
Knowing the difference between good vs bad credit score reports can help ease your mind.
Read on to empower yourself with more knowledge about credit scores.
Fair and Bad Credit Scores
All credit scores begin at the base level of 300. You can’t have a score that’s below that range.
That said, you have poor or bad credit with a score that falls anywhere from 300-690. Most lenders who see this type of score range will consider you to be risky to lend to.
That means lenders may not be willing to work with you. Those that will work with you may charge you significant interest and fees. At this range, you’re missing out on financial opportunities. You may not get extended a line of credit when you need it most.
Good Credit Scores
You have ‘good’ credit when you reach a score of 700. This score will open up many financial doors for you.
Once you hit 730, you’ll be in the excellent score range. This range means you’ll get the best financial opportunities, deals, and interest rates. You’re the ideal borrower for most institutions.
Less than 1% of Americans are able to get a perfect 850 score. Unless you’re determined, it’s best not to aim for a perfect score. After all, it’s healthy and normal for your credit score to fluctuate over time.
How to Check Credit and Understand Credit Scores
You may be thinking — where do I even find this credit score? You don’t calculate it yourself. Instead, you’ll need to request a report from one of the major credit agencies.
Once you do, you’ll get that exact credit score number. Read through the report to determine what’s impacting your score. Do you pay your bills on time? Do you have a debt in collections?
You can compare it to the examples above to determine if your score needs improvement. If so, then there are specific steps you can take to repair credit scores that aren’t up to par.
Good VS Bad Credit Score: Moving Forward in 2022
Understanding the difference between good vs bad credit score reports is step one. Step two should be getting your credit score up into the average or good range! The good news is that it’s often easier to repair your credit than you might think at first.
Do you need some extra tips and help to thrive financially in 2022? If so, then you know you’re in the best place to get informed. Head over to our main blog page now to see more of our favorite financial articles.