Anyone who has ever borrowed money or opened up an account in their own name has also attached their Social Security number to a credit report and a credit score. Whether you know it or not, most of your financial activity is monitored and recorded by credit reporting bureaus that use unique formulas to weigh your actions and assign you a grade that lenders can evaluate. This credit score is looked at by lenders, landlords and other individuals who may be interested in doing business with you and helps them decide the terms of your agreement.
A good credit score, naturally, will result in rates, fees or credit limits that are much more in your favor, while the high risk indicated by a bad credit score will do just the opposite. But what exactly is a good or bad credit score?
Excellent credit is considered a score above 800, and it is not easy to attain. Not only do you have to have a long and mature history of lending, but it also must be virtually unmarred by late payments, collections, liens, judgments or bankruptcy. There are very few people who successfully achieve this A+ borrowing status, but those who do can pretty much enter any financial agreement they like with the best terms possible.
From there, very good credit is generally considered between 750 and 800, simply good credit is between 700 and 750, fair credit is between 650 and 700, bad credit falls between 600 and 650 while anything below 600 is considered very bad.
Along with acting responsibly on your own accord, making sure you keep an eye on your credit information is also key to achieving a favorable score. It’s impossible to 100 percent guarantee against the pitfalls of identity theft, but a credit monitoring service can work wonders in helping you watch out for signs of it.