What to do with a high credit score | The perks of good credit
What to do with a good credit score

What to do with a good credit score

It’s more than just a number: Here’s how you can benefit from a good credit score.

If you’ve checked your credit score and find it falls into a higher range, you’ll want to leverage it to your advantage. This guide takes you through what it means to have a good credit score, what you can do with it and how you can further strengthen it.

What is a “good” credit score?

In the United States, your credit score is calculated by credit bureaus that include the “big three”: Equifax, Experian and TransUnion. Each credit-scoring bureau uses different criteria for measuring your credit score, weighing your history against a proprietary algorithm.

Lenders and even the bureaus weigh the information in your credit history differently, but they’ve widely adopted two scores: FICO Score and VantageScore. Both weigh the same factors when determining your credit score, including how long you’ve had credit, your payment history, your credit utilization ratio and how many loan and other types of credit you carry.

Credit ratingFICO ScoreVantageScore
Excellent800 or higher781 or higher
Very good740–799720–780
Good670–739658–719
Fair580–669601–657
Poor579 or lower600 or lower

Today, FICO Scores are used in 90% of credit decisions, which makes it a good barometer of how potential lenders might see you when determining approval.

I have a good credit score. What can I do with it?

Among a range of benefits that come with a good credit score — like lower APRs and longer repayment periods on loans — you can leverage your good credit score to:

  • Ask for a discount on your home loan. Because your good credit score indicates that you have steady finances, you may be able to negotiate a lower rate with your home loan provider or even avoid paying certain fees. Discounts generally won’t work for a credit card or personal loan.
  • Consider a peer-to-peer loan. Peer-to-peer is a relatively new type of lending where your interest rate is based on your credit score. The better your credit score, the lower your rate — which can be as low as 4% for an unsecured personal loan.
  • Get rewarded. If you’re considering applying for a new credit card or upgrading your current one, why not consider a card with rewards? If you pay your balance in full with each statement, you can avoid paying interest.
  • Opt for a risk-based lender. Similar to P2P loans, newer lenders may award you stronger interest rates depending on your credit rating. If you have a strong credit score, you’ll typically receive a lower rate for your loan.

I don’t have a good credit score. How can I improve it?

  • Order a copy of your credit report. Request a free credit report from the major bureaus every year to make sure the details in it are current and accurate. Your report can give you a better understanding of how to improve your finances. For example, if you see a lot of listings for late payments, focus on paying your bills on time to improve your score over the long term.
  • Pay down your credit card accounts. Your overall credit score is determined by many variables, including your credit utilization rate. To indicate to lenders that you’re a responsible borrower, only carry a balance with a utilization of 30% or less. For example, if your credit limit is $1,000, keep your balance below $300, which is 30% of your limit.
  • Avoid hastily closing unused accounts. While this seems like a good strategy in theory, having only newer accounts will result in a lower score. Lenders want to see a history of credit.
  • Don’t attempt to open new accounts until your score improves. Every time you apply for credit, it’s listed on your credit report and pulls down your score. By waiting, you can take advantage of better interest rates.

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Adrienne Fuller

Adrienne is a Publisher at finder and has one goal: to deliver the accurate and transparent information she wishes she had when she made some of life's important financial decisions. When she's not helping folks save money, she's hiking with her two Catahoulas around her home in San Diego.

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