Before we go deep into understanding what good credit score is, let us first understand what a credit score is. To understand the basic concept of credit scores, you have to keep one thing in the mind that it is used by the money lenders. Now, the lending party could be a person or a bank. It is used in the case of credit cards also. The credit score actually let the money or the credit card company decide whether to give you the money or not. Therefore, it is important for a person to maintain good credit scores.
In order to understand credit scores in deep detail, one should focus on understanding its types. There are a lot of credit scores, but on the primary level, you can focus on two of them. These are FICO scores and Vantage Scores. Let us discuss them, one by one.
- FICO scores
Fair Issac Corporation is the name of the institution that forms this credit score. It is one of the basic, yet important credit score. There are a lot of lenders that use this credit score and the points tally in between 300 to 850. Here, we are talking about good credit scores. So, in the case of FICO scores, a score above 600 is considered to be good. Getting a score about or above 800 is exceptional.
- Vantage Scores
If we talk about the development of Vantage scores, then there are 3 credit bureau responsible for it namely, Experian, Equifax, and TransUnion. In this score also, points tally from 300 to 800 and 700 is considered as a good credit score. A person having a credit score of more than 700 has a really good credit profile.
This is enough to understand about a good credit score. Once you will apply for loans or credit cards, you will actually understand the importance of it.