What is a Good FICO Score? [and 3 Steps To Get One Fast!] | Summary and Q&A
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TL;DR
A good FICO score is essential for access to credit and loans, with a score above 670 considered good. However, nearly 20% of Americans have a credit score of 600 or lower, limiting their financial options.
Key Insights
- 💳 Roughly 60 million Americans are excluded from the financial system due to low credit scores and limited access to credit.
- 🥶 Millennials face challenges in building credit due to shorter credit histories, with an average FICO score of 630 for those under 29 years old.
- 💯 A credit score above 670 is generally considered good, while a score below 600 is considered bad.
- 💯 The FICO credit score determines loan eligibility and interest rates; a lower score can result in higher interest payments and limited loan options.
- 💳 Adding missing accounts to credit reports and paying off credit card balances before the reporting date can contribute to improving credit scores.
- 💳 Prioritizing payment on high-balance cards helps lower credit utilization ratios, benefiting credit scores.
Transcript
A bad credit score will cost you over $70,000 in extra interest payments on a mortgage…and that’s if you even get approved. But what is a good credit score and how does that loan officer decide whether to greet you with a smile or slam the door in your face? In this video, I’ll not only show you the difference between a good FICO score and bad cred... Read More
Questions & Answers
Q: Why is having a good credit score important?
A good credit score opens up access to credit and loans at lower interest rates, while a bad score can limit financial options and incur higher costs.
Q: How does credit score affect mortgage rates?
Having a higher credit score, such as 760 or above, qualifies for lower mortgage rates, while a score of around 620 may lead to higher rates and thousands of dollars in additional interest payments.
Q: What credit score is needed to buy a car?
A credit score below 500 FICO may result in car loan rates close to 20%, significantly higher than rates for those with good credit.
Q: How can I increase my credit score?
Three credit score hacks include adding missing accounts to your credit report, paying off credit card balances before the reporting date, and prioritizing payment on high-balance cards to lower credit utilization ratios.
Summary & Key Takeaways
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A bad credit score can cost over $70,000 in extra interest on a mortgage and hinder loan approvals.
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The FICO credit score, ranging from 300 to 850, determines creditworthiness based on payment history, debt levels, and negative marks such as late payments or bankruptcies.
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Around 55% of Americans have a score of 700 or above, while 20% have a score of 600 or lower.
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