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Average Credit Scores

One of the main questions about credit scores is which ones are average, so that people who know their credit scores from all three bureaus know where they stand when it comes to getting credit extended to them and getting decent interest rates. If they have poor credit, they aren’t going to get approved for any kind of loan with a good interest rate. If they really have very bad credit, they won’t be able to get approved at all, and that could stop them from buying a home, a car, or other things that they really need. That’s why it’s so very important to keep your credit scores high. Unfortunately, a lot of people don’t see the point to that or they don’t realize how credit scores are calculated, so they end up with lower credit than they expect because they didn’t realize that they were actually hurting their credit.

How to Find (and Improve) Your Credit Score

If you ask the three credit bureaus for your credit reports, you can also get your scores at the same time. Usually the scores aren’t free, but FICO scores are important, so it’s a good idea to find out what yours are. You can also make your scores better by keeping your credit card balances at less than 30% of the amount you’re allowed to borrow, paying bills on time, and having different kinds of credit – credit cards, a car loan, a mortgage, personal loans, etc. Don’t try to overextend yourself just to get a good mix of credit, though. Only borrow what you need when you need it and pay it back properly, and the rest will generally take care of itself.

So, What’s Really ‘Average?’

If your credit score is around 600-650, that’s generally considered to be average. Unfortunately for people with average credit, the rules have changed. Lenders aren’t giving money out as easily anymore because of the economic problems and the foreclosure crisis. Average credit that would have worked for borrowing in the past won’t work for borrowing today – at least not at the same interest rates. Someone who has a credit score of 700-750 or more will be a lot more likely to have lenders who want to loan money to him. In between 650-700 a person can still get a loan for most things, but it’s also quite possible that the interest rate will be something that he won’t be happy paying.

Borrowing With Average Credit

It might be better not to borrow if the interest rate is too high, because that can really add a lot to the life of the loan. If you work to improve your credit score for a while before you borrow for a big purchase like a house or a car, you’ll have a lot better chance of getting a great interest rate and better terms for your loan. You can also get lower interest rates on credit cards and should be able to negotiate more easily. It’s worth the wait to raise your credit from average to good so you can borrow more easily.

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