Everybody wants “good credit.” But what is a good credit score and how do you get there?
Many of us spend years stuck with a less-than-stellar credit score that negatively impacts every aspect of our financial lives. The good news — it doesn’t have to be that way.
Here are five questions to ask when considering what is a good credit score, and how you can get on track for receiving one.
1. What are credit score ranges?
Both use the same credit score range – from 300 to 850. Within this range, the quality of your credit score is broken down into 5 main categories:
- 750-850 – Excellent credit
- 700-749 – Good credit
- 650-699 – Fair credit
- 600-649 – Poor credit
- 300-599 – Bad credit
So what is a good credit score? Anything between 700 and 749. You could still be in decent shape below 700, though. You’re only in subprime credit territory if you fall below 640.
2. Where can I find my credit score?
You could pay to receive a credit report from one of the three big credit bureaus — Experian, TransUnion, and Equifax.
There are, however, a couple of free ways to find your credit scores:
- Your credit card issuer may include your FICO Score with your monthly statement
- You can sign up for free credit monitoring through sites like Credit Karma and Credit.com
- Credit monitoring will include your VantageScore as well as access to information on your credit reports
If you’re curious about what to expect from free credit monitoring, you can find out more about how to receive a “Credit Report Card” from Credit Karma here. You’ll be on your way to seeing what is a good credit score in no time.
3. How long does it take to get good credit?
It really depends on how bad your credit is to start with. If your credit is currently fair, you could get to good in under three months.
But if your credit is bad, it could take six months to a year or more for you to see a significant improvement.
In other words, it takes as long as it takes. All you can really control are the steps that get you there.
1 – 3 Months
- Request all three of you credit reports from Experian, TransUnion, and Equifax through AnnualCreditReport
- Look through your credit reports and dispute errors with the credit bureaus or original creditors
- Ask for debt validation from collection agencies
- Sign up for free credit monitoring through Credit Karma and Credit.com
3 – 6 Months
- Send follow-up letters to the credit bureaus, if necessary
- Settle old, unpaid debts (check the statute of limitations on debt in your state)
- Make a plan for paying off your debt
- If you don’t have a credit card, apply for one so that you have a better credit mix and more available credit (get a secured credit card if need be)
6 – 12+ Months
- Continue paying off your debt, increasing your payments if possible
- If you only have one credit card, consider applying for another one (if several months have passed since you opened the first one)
- Check your credit reports again through AnnualCreditReport
4. What are some other habits for building a good credit score?
Pay all of your bills on time, every time. And return your credit card balances to zero every month.
If you carry credit card balances from month to month, work on paying them off. Avoid using more than 30 percent of your available revolving credit at any one time.
Do not apply for several lines of credit at once, and don’t take out an installment loan just to improve your credit.
5. Could my credit score get worse before it gets better?
Here are a few ways you could actually hurt your credit score, and how to avoid them.
A hard inquiry is what gets listed on your credit reports every time you apply for a new line of credit. That’s why it is so important to make sure you only apply for a credit card you know you’re qualified for.
The last thing you want is to get turned down for a credit card because applying for another one will mean another hard inquiry. The good news is hard inquiries cause minimal damage to your score and are only temporary.
Applying for too much credit at once
This is a big red flag for credit bureaus. It signals that you may be getting in over your head and, in turn, becoming a greater credit risk.
Be sure to leave several months in between credit applications.
Paying off an installment loan
While off a huge loan sounds like a dream come true, you could see your credit take a hit. That’s because you’ve decreased the amount of credit you have.
Credit scores are impacted by the variety of your credit lines. So if your student loan let’s say was your only installment loan – and all you’re left with are credit cards or nothing else at all – your credit score may suffer.
Just give it time and continue following good credit best practices. Seeing your credit score fall a bit after paying off a loan is far preferable to carrying that debt any longer than necessary.
What is a good credit score in the end?
What is considered a good credit score? Yes, it’s 700-749. But when you get right down to it, good credit isn’t really the number.
Good credit is the behavior that shapes it. Focus on that and a good credit score will naturally fall into place.
Interested in refinancing student loans?Here are the top 6 lenders of 2020!
|Lender||Variable APR||Eligible Degrees|
|1.89% – 6.66%1||Undergrad & Graduate|
|1.89% – 5.90%2||Undergrad & Graduate|
|2.25% – 6.09%3||Undergrad & Graduate|
|1.99% – 5.34%4||Undergrad & Graduate|
|1.97% – 8.54%5||Undergrad & Graduate|
|2.39% – 6.01%||Undergrad |
|Check out the testimonials and our in-depth reviews! |
1 Important Disclosures for Splash Financial.
Splash Financial Disclosures
Terms and Conditions apply. Splash reserves the right to modify or discontinue products and benefits at any time without notice. Rates and terms are also subject to change at any time without notice. Offers are subject to credit approval. To qualify, a borrower must be a U.S. citizen or permanent resident in an eligible state and meet applicable underwriting requirements. Not all borrowers receive the lowest rate. Lowest rates are reserved for the highest qualified borrowers. If approved, your actual rate will be within a range of rates and will depend on a variety of factors, including term of loan, a responsible financial history, income and other factors. Refinancing or consolidating private and federal student loans may not be the right decision for everyone. Federal loans carry special benefits not available for loans made through Splash Financial, for example, public service loan forgiveness and economic hardship programs, fee waivers and rebates on the principal, which may not be accessible to you after you refinance. The rates displayed may include a 0.25% autopay discount.
The information you provide to us is an inquiry to determine whether we or our lenders can make a loan offer that meets your needs. If we or any of our lending partners has an available loan offer for you, you will be invited to submit a loan application to the lender for its review. We do not guarantee that you will receive any loan offers or that your loan application will be approved. Offers are subject to credit approval and are available only to U.S. citizens or permanent residents who meet applicable underwriting requirements. Not all borrowers will receive the lowest rates, which are available to the most qualified borrowers. Participating lenders, rates and terms are subject to change at any time without notice.
To check the rates and terms you qualify for, Splash Financial conducts a soft credit pull that will not affect your credit score. However, if you choose a product and continue your application, the lender will request your full credit report from one or more consumer reporting agencies, which is considered a hard credit pull and may affect your credit.
Splash Financial and our lending partners reserve the right to modify or discontinue products and benefits at any time without notice. To qualify, a borrower must be a U.S. citizen and meet our lending partner’s underwriting requirements. Lowest rates are reserved for the highest qualified borrowers. This information is current as of October 1, 2020.
2 Important Disclosures for Laurel Road.
Laurel Road Disclosures
All credit products are subject to credit approval.
Laurel Road began originating student loans in 2013 and has since helped thousands of professionals with undergraduate and postgraduate degrees consolidate and refinance more than $4 billion in federal and private school loans. Laurel Road also offers a suite of online graduate school loan products and personal loans that help simplify lending through customized technology and personalized service. In April 2019, Laurel Road was acquired by KeyBank, one of the nation’s largest bank-based financial services companies. Laurel Road is a brand of KeyBank National Association offering online lending products in all 50 U.S. states, Washington, D.C., and Puerto Rico. All loans are provided by KeyBank National Association, a nationally chartered bank. Member FDIC. For more information, visit www.laurelroad.com.
As used throughout these Terms & Conditions, the term “Lender” refers to KeyBank National Association and its affiliates, agents, guaranty insurers, investors, assigns, and successors in interest.
Assumptions: Repayment examples above assume a loan amount of $10,000 with repayment beginning immediately following disbursement. Repayment examples do not include the 0.25% AutoPay Discount.
Annual Percentage Rate (“APR”): This term represents the actual cost of financing to the borrower over the life of the loan expressed as a yearly rate.
Interest Rate: A simple annual rate that is applied to an unpaid balance.
Variable Rates: The current index for variable rate loans is derived from the one-month London Interbank Offered Rate (“LIBOR”) and changes in the LIBOR index may cause your monthly payment to increase. Borrowers who take out a term of 5, 7, or 10 years will have a maximum interest rate of 9%, those who take out a 15 or 20-year variable loan will have a maximum interest rate of 10%.
KEYBANK NATIONAL ASSOCIATION RESERVES THE RIGHT TO MODIFY OR DISCONTINUE PRODUCTS AND BENEFITS AT ANY TIME WITHOUT NOTICE.
This information is current as of September 9, 2020. Information and rates are subject to change without notice.
3 Important Disclosures for SoFi.
4 Important Disclosures for Earnest.
To qualify, you must be a U.S. citizen or possess a 10-year (non-conditional) Permanent Resident Card, reside in a state Earnest lends in, and satisfy our minimum eligibility criteria. You may find more information on loan eligibility here: https://www.earnest.com/eligibility. Not all applicants will be approved for a loan, and not all applicants will qualify for the lowest rate. Approval and interest rate depend on the review of a complete application.
Earnest fixed rate loan rates range from 2.98% APR (with Auto Pay) to 5.49% APR (with Auto Pay). Variable rate loan rates range from 1.99% APR (with Auto Pay) to 5.34% APR (with Auto Pay). For variable rate loans, although the interest rate will vary after you are approved, the interest rate will never exceed 8.95% for loan terms 10 years or less. For loan terms of 10 years to 15 years, the interest rate will never exceed 9.95%. For loan terms over 15 years, the interest rate will never exceed 11.95% (the maximum rates for these loans). Earnest variable interest rate loans are based on a publicly available index, the one month London Interbank Offered Rate (LIBOR). Your rate will be calculated each month by adding a margin between 1.82% and 5.50% to the one month LIBOR. The rate will not increase more than once per month. Earnest rate ranges are current as of October 26, 2020, and are subject to change based on market conditions and borrower eligibility.
Auto Pay discount: If you make monthly principal and interest payments by an automatic, monthly deduction from a savings or checking account, your rate will be reduced by one quarter of one percent (0.25%) for so long as you continue to make automatic, electronic monthly payments. This benefit is suspended during periods of deferment and forbearance.
The information provided on this page is updated as of 10/26/2020. Earnest reserves the right to change, pause, or terminate product offerings at any time without notice. Earnest loans are originated by Earnest Operations LLC. California Finance Lender License 6054788. NMLS # 1204917. Earnest Operations LLC is located at 302 2nd Street, Suite 401N, San Francisco, CA 94107. Terms and Conditions apply. Visit https://www.earnest.com/terms-of-service, email us at [email protected], or call 888-601-2801 for more information on our student loan refinance product.
© 2020 Earnest LLC. All rights reserved. Earnest LLC and its subsidiaries, including Earnest Operations LLC, are not sponsored by or agencies of the United States of America.
5 Important Disclosures for LendKey.
Refinancing via LendKey.com is only available for applicants with qualified private education loans from an eligible institution. Loans that were used for exam preparation classes, including, but not limited to, loans for LSAT, MCAT, GMAT, and GRE preparation, are not eligible for refinancing with a lender via LendKey.com. If you currently have any of these exam preparation loans, you should not include them in an application to refinance your student loans on this website. Applicants must be either U.S. citizens or Permanent Residents in an eligible state to qualify for a loan. Certain membership requirements (including the opening of a share account and any applicable association fees in connection with membership) may apply in the event that an applicant wishes to accept a loan offer from a credit union lender. Lenders participating on LendKey.com reserve the right to modify or discontinue the products, terms, and benefits offered on this website at any time without notice. LendKey Technologies, Inc. is not affiliated with, nor does it endorse, any educational institution.
Subject to floor rate and may require the automatic payments be made from a checking or savings account with the lender. The rate reduction will be removed and the rate will be increased by 0.25% upon any cancellation or failed collection attempt of the automatic payment and will be suspended during any period of deferment or forbearance. As a result, during the forbearance or suspension period, and/or if the automatic payment is canceled, any increase will take the form of higher payments. The lowest advertised variable APR is only available for loan terms of 5 years and is reserved for applicants with FICO scores of at least 810.
As of 11/13/2020 student loan refinancing rates range from 1.97% to 8.54% Variable APR with AutoPay and 2.95% to 8.77% Fixed APR with AutoPay.