This is a question I get asked very often, and the answer, as many answers are, is vague at best, but the bottom line is, the higher your credit score the better.

So how high is high?

This is where it can be a bit vague as different credit bureaus use different scores, although all use the same scoring models, they may assign different points to different factors.

Throw into the mix that banks and lenders may use their own models and ideas of what is a good credit score, or is too low to approve a loan, and then also landlords and insurance companies and others that use credit scoring, and you have a very subjective view on what is a good credit score and what is not.

In the end, the higher your credit score is, the better off you will be; in getting a loan approved, and also receiving a lower interest rate.

Improving Your Credit Score

In order to improve your credit score, you first must know what your credit score is. Which by contact the various credit bureaus, you can view a copy of your credit report, and see if there are any accounts affecting your credit.

There are tips on understanding credit scoring and improving your credit score here.

The issue then becomes the subjective nature of who is either granting you credit, offering a job, letting out a place to live, or whatever reason someone may use credit scoring as a guide to grant your request for a job, place to live, an insurance policy, or a loan.

I recently saw an advert on TV from a company offering a service to help you monitor your credit, and credit score, and improve it. It seemed like a very legitimate service, until the end of the advert.

At the end came this disclosure that while you may improve your credit score, there are no guarantees as to how that score may be used by lenders and landlords….meaning different lender and landlords may use different scoring models, and once again, a high credit score to one lender or landlord may not be high enough for another.

So the only real answer to what is a good credit score is the credit score that someone will accept as good enough.

Credit scoring is changing, here and in other parts of the world. A concept called Social Credit Reports is being used in China, and I feel it will become the new “norm” of credit scoring every where in the near future.

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