It is a very important question to ask before looking for a big loan. If you find out that the definition of a good credit score and your actual score differ greatly, it might be the time to repair credit before moving forward.

So what exactly constitutes a good credit score? In order to determine that, we first need to know the scoring parameters that form the scoring scale. Your credit score is influenced by a variety of factors such as outstanding debt, your credit history, the types of credit you current have or use and your payment history.

When analyzed, these factors make up a score that can run anywhere from a low of 375 to a high of 830 or 900, depending on which expert you ask. These numbers generally serve as a guideline that a credit lender can then use to incorporate into their own credit rules that are tailored to their company’s in-house credit program.

Your credit score defines to a lender your ability and willingness to repay a loan. So the lower those numbers are, the more you are going to pay. Even worse…if those numbers are too low, you won’t be paying anything, because you simply won’t get the funds you need.

FICO score is the most renowned model of credit score in the United States and is used by most financing and credit institutions that measure a person’s creditworthiness. FICO scores are also used by credit card providers and banks to determine your credit limits, interest rates and even paying period.

The national average for the FICO credit score varies. A consumer with a credit score higher than 700 is considered excellent, a credit score between 601 – 699 is decent and anything less than 600 could probably use a financial makeover in order to improve the credit score.

Generally speaking, however, a credit score higher than 650 has the potential to be considered good credit in most cases.

Also, it is not uncommon for a person to have several FICO scores. This is because each agency considers different parts of one’s credit history based on the access that they have.

And remember that, every time your credit is pulled, your FICO credit score drops. So if you are about to start applying for a home loan, you don’t want to have your credit pulled until you have narrowed down which loan company you want to work with.

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