Your credit score affects all aspects of your financial life. It can determine whether you get a good rate on mortgages, auto loans and insurance, and it can even affect whether you can rent a nice apartment or get the job you want. It's important to know what your credit score is, and the optimal range for your score.
Range
Generally speaking, your credit score can range from 280 at the low end to 850 for near-perfect credit. The majority of scores fall between 600 and 750, according to credit reporting agency Experian.
A Strong Score
Realistically, it would be almost impossible to attain even 800, and if your score is above 760, you are in the top tier of credit users, and have access to the best interest rates on all financial products. You may also find the best rates available even if your score is between 720 and 760, depending on the lender.
Good Enough
If your credit is around the 700 to 720 mark you could expect to pay about 0.2 percent more on a mortgage rate than someone with better credit, according to MyFICO. While that may add up in the long term, it's not so big a difference that improving your credit score should take priority over everything else in your financial life. Loans get progressively more expensive below 700, and If your score falls below 620 you will only be able to access sub-prime loans.
Improving Your Credit
If your credit is in the not-so-good range, you can work at improving it but don't expect instant results. Fair Isaac says it's unusual to get more than a 20 point bump in any three-month period, so If you want to go from 620 to 720, you should look at it as at least a year-long project. During that time, work at paying all of your bills on time, pay down your highest-balance credit cards, don't open any more credit accounts and order your credit report so that you can dispute any incorrect information.
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