What is a Good Credit Score?
A Credit Score is a number that lenders use to help decide whether or not someone is eligible for a mortgage loan. This score also tells lenders how responsibly you use credit. The better the score, the easier you may find it to become approved for new loans or lines of credit.
At Gershman Mortgage, we want to help you start your journey home today. That’s why we sat down with Loan Officer David Bell to understand what makes a good credit score. Checkout out his helpful breakdown and a few tips below:
- 800 – 900 = Exceptional
- 740 – 799 = Very Good
- 670 – 739 = Good
- 580 – 669 = Fair
- 250 – 579 = Risky
“Credit scores are simply a risk determination of possible default. The higher the score, the less likely someone is to default. People with higher credit will receive better rates and terms on possible loans.⠀
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Of the five factors, one that is very heavy weighted but often misunderstood is the second factor of available credit. When someone exceeds 30% of their allowable credit limit with a credit card, this can hurt their total score by up to 30%.⠀
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This is a HUGE factor, but it’s also easy to control and remedy once the person understands the rules. As we near the holiday shopping season, make sure to be mindful of your credit card balances. Excessive purchases now can hurt your scores for months going forward.”
Monitoring and managing your credit report leads to a higher score, which in turn lowers your cost to borrow. If you want to improve your credit so you can keep more money in your pocket, stay tuned for next week’s blog on ‘How to Boost Your Credit Score’.
If you would like more information about this topic, please contact Stephanie Goone at 314-824-1257 or email sgoone@gershman.com.
NMLS #138063 16253 Swingley Ridge Road Suite 400 Chesterfield, MO 63017 (800) 457-2357 Equal Housing Lender. www.gershman.com
