Maintaining good credit comes with advantages. According to Equifax®, the good credit score range is 670-739. When lenders see that you use and pay back credit responsibly, they may offer lower interest rates, better terms and a quicker approval process.
Many of the suggestions for improving your credit score are the same as those for people who need to completely rebuild their credit. These tips include:
- Pay loans and bills on time with no missed payments.
- Stay within credit limits—aim to keep credit in use under 30% of your available credit.
- Borrow or charge only what you can afford to pay back.
- Check your credit report regularly through credit bureaus, like TransUnion® and Experian®, or get your VantageScore® number by using the Mission: Credit Confidence® Dashboard.
If you want to move your credit from good to very good (740-799), here are a few more strategies to consider:
- Keep old credit card accounts open so your available credit doesn’t drop. Having more credit allows you to borrow more; a good credit utilization ratio is important as well. To get the best credit scores, users should try to keep their credit utilization in the single digits.
- Work with credit card balances to find what’s right for you. Transferring debt to one card with a lower interest rate can help you pay down your debt.
- Diversify your credit mix through different types of loans, such as credit cards, auto loans or a mortgage.
Using Credit to Improve Your Finances
A good credit score makes it easier to shop around for a good price, buy or rent a home, or finance a major purchase. With an improved credit score, you may:
- ask for an increased credit limit and better interest rates. With a better credit history, lenders are often more willing to give a higher credit limit and lower interest rate because you’re likely to pay the money back. Lower interest rates allow you to borrow money for a lower cost while higher limits allow you to borrow more.
- refinance your mortgage. Finding that sweet spot for getting or refinancing your mortgage is key. Although 720 was once considered ideal, a score of 740 is often the minimum to get the best deal and not incur extra fees. Refinancing your mortgage with a better credit score can mean a better interest rate and lower payments.
- get a great car loan rate. A higher credit score often means lenders are more willing to give a lower financing rate, saving you money. Have an existing car loan? Check whether refinancing makes sense for you.
- apply for a new job. Some employers perform credit inquiries when you’re being considered for a job, which could delay you professionally. With an improved credit score, you could get a higher-paying gig.
Bad credit doesn’t have to hold you back. Making on-time payments, improving your credit utilization ratio by balancing opening new accounts with minimizing additional debt and regularly monitoring your credit will help you get a good score.
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This content is intended to provide general information and shouldn't be considered legal, tax or financial advice. It's always a good idea to consult a tax or financial advisor for specific information on how certain laws apply to your situation and about your individual financial situation.