This Is The Credit Score You Should Actually Be Striving For

Discussion in 'Career, Work, Finances and Education' started by OckyDub, Sep 11, 2019.

  1. OckyDub

    OckyDub is a Verified MemberOckyDub I gave the Loc'ness monstah about $3.50
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    Everyone wants to be perfect at something. But when it comes to your credit score, that perfect 850 score may not be worth the anxiety. In reality, your score only has to be good enough to impress lenders.

    Ted Rossman, analyst at CreditCards.com, noted this in a recent article where he explained his strategy for choosing a new credit card. “Once you’re at 740-plus, you’ll qualify for the best terms,” he said. Actions that impact your score a little bit—like applying for a new credit card—might ding your score a few points, but not enough for you to be concerned about the health of your credit profile, he explained.

    But 740 is 110 points below that top score. Can you really get the best rates for loans, credit card interest rates, or other banking products with what feels like getting a B+ instead of an A?

    I asked Rossman why 740 is a magic number. “Anything 740-plus is considered excellent and lenders don’t distinguish beyond that,” he said. That’s because there are a variety of scoring methods that lenders use to determine how creditworthy you are when you apply for credit.

    VantageScore, the number you often see when you use free credit score tools, is a collaboration among the three credit reporting bureaus, and there are two versions of that method that could be used to calculate your score.

    But lenders more frequently use FICO to generate credit scores. And, like VantageSCORE, FICO has several different versions of its own scoring model. “Different lenders use different formulas, often because they get comfortable with one and want to avoid the cost and hassle of upgrading,” Rossman explained.

    Mortgage lenders can use scoring models as old as FICO 2, while FICO 8 and 9 are the most commonly used FICO models, Rod Griffin, Director of Education at Experian, said. He considers the key score benchmark to be 750. “It depends on the type of score and the lender’s threshold,” Griffin said.

    And just to add one more wrinkle to this whole situation, some scoring models have a top score that’s well into the 900s.

    But don’t worry about the 850s and the 900s right now. Instead of working on your numerical score as a financial goal, it’s more important to think about what factors make up that score.

    If you pay at least your minimum balance on time and don’t use too much of the credit that’s been extended to you, you’re likely to have a solid credit score, although the actual number may vary depending on where you look. So stay clear of your credit limit and set up autopay for your monthly statement. Once you hit that 750 range, you can be confident that you’ve earned a spot near the top of the class.

    https://twocents.lifehacker.com/this-is-the-credit-score-you-should-actually-be-strivin-1838037288
     
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  2. Nick Delmacy

    Nick Delmacy is a Verified MemberNick Delmacy Da Architect
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    I'm up to 525 now, is that good?

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  3. RolandG

    Bae Material Squad Leader The 1000 Daps Club Supporter

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    I'm sure you're joking. I've been above 800 for a few years now once my first lines of credit matured. It's hard to get to 850 at a young age because you are penalized for not having had credit for 3,000 years. Now if I can maintain where I am, I'll be good.
     
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