Understanding Your Credit Score

MEANING OF A CREDIT SCORE

Your credit score could be anywhere from 300 to 850, with 850 being the best possible credit score. Good credit falls between 700 and 750, while excellent credit is any number above 750.

It's also possible for there to be different credit scoring models, though you should always try to have a credit score that's near the top of each model's range since that can lead to lower interest rates. Your credit score is affected by your credit history and can increase if you consistently pay your bills on time.

HOW TO FIND OUT YOUR CREDIT SCORE

There are a number of ways you can discover your current credit score. You can order it for free from different websites, like WalletHub.com or CreditKarma.com. Your credit card issuer, bank or credit union may provide your credit score online or in your billing statement.

There are also certain credit bureaus that allow you to pay for your credit report. When you receive your credit score, you will likely also get a gauge to help you understand if it's within a good or bad range.

YOUR CREDIT CARD'S EFFECT ON YOUR CREDIT SCORE

If you have a good credit score, you can have a lower interest rate on your credit cards, mortgage or car loan, allowing you to save money over time. Credit utilization affects almost a third of your credit score. As such, if your credit card balance equates to more than 30 percent of the credit amount you have available, your credit score could be negatively impacted. On the flip side, paying off your credit card balance and maintaining a lower balance can help boost your credit score.

Before moving forward in the car-shopping process, be sure to research your credit score. Once at Dave Kehl Chevrolet, our staff will help walk you through the financing part of the process.