Good Credit Matters

Good Credit Matters

Why having a good credit score is so important now

A good credit score is always important, but lately, as lenders tighten things up, a high score is becoming even more vital than usual. When lenders increase their standards for doling out loans and credit cards, suddenly it can be extremely difficult to get approved.

Two recent reports show that lenders are making things hard on consumers. In one study, a high percentage of banks and lenders reported that they had tightened standards for credit cards and loans. In another report by the Federal Reserve, the rejection rate for loans — such as mortgages, car loans, and more — jumped by 22 percent. That’s the highest rate in five years. These trends highlight just how important a high credit score is right now.

When it comes to keeping your score as high as possible, it helps to know what, exactly, is a high score. For VantageScore, 750 to 850 is excellent, while 700 to 749 is good. For FICO, 800 or higher is excellent, 740 to 799 is very good and 670 to 739 is good. Now that you know what scores you’ll need, a few tips to improve your score:

  • Pay your bills on time, every time.

  • Regularly check your credit report for errors.

  • Pay down debts.

  • Only apply for new credit cards when needed.

  • Keep credit cards open even if you don’t use them (unless they carry a hefty yearly charge)

Chris O'Shea

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