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Most consumers are aware that they have a credit score. Some of them even realize that their credit score can help potential lenders determine whether they will receive a loan and what interest rate they will be charged as they pay back that debt. But what exactly is a good credit rating score?
Credit scores are selected from a range of numbers beginning at about 300 and going up to approximately 850. The higher the number, the better the credit score.
Generally speaking, anything from 650 and above is considered a good score and will signify solid credit worthiness to potential lenders.
Maintaining a good credit rating score is not necessarily difficult.
Cultivating good spending habits and a healthy relationship with debt are good places to start. All bills should be paid on time. That means even bills such as utilities, which will not necessarily affect credit scores.
Essentially, it is just a good habit to pay all bills on time to develop a substantial pattern of reliable spending behaviors. It is also important for consumers to not live beyond their means. It may be tempting to buy a more expensive sports car rather than the more practical sedan. The consumer may even be able to obtain sufficient financing to be able to buy the flashier car.
But before signing on the dotted line, consumers should take a good look at the monthly payment – is it truly a dollar amount they can afford and still keep up on all their other obligations? If the monthly payment makes the consumer apprehensive, that is probably a good sign that the car is beyond the buyer’s means. Consumers should never take on debt obligations they cannot afford as this can result in defaulted loans and delinquencies which will negatively reflect on the consumer’s credit score.
By paying bills on time and living within their means, consumers can maintain a good credit rating score.
Doing so will ensure their ability to receive the credit they deserve when they need it. The responsible use of debt can be an asset to the consumer and actually help to enhance their credit score. By not allowing their debt to balloon and keeping up with making payments on time, consumers can demonstrate responsible habits to potential lenders, making it easier for them to obtain financing for cars, a new home, or even just a store credit card.