What is good credit vs bad credit?

Good credit and bad credit refer to a person's credit history and credit score, which is a numerical representation of a person's creditworthiness based on their financial behavior. Credit history is a record of a person's borrowing and repayment activities, including credit cards, loans, and other forms of credit.

BAD: 300-580 ||

GOOD: 581-680 ||

GREAT: 740+

Good credit refers to a positive credit history and a high credit score, which is typically above 700. It indicates that a person is considered a low-risk borrower and is likely to make timely payments on their debts. A good credit score can make it easier for a person to obtain credit at a lower interest rate and better terms.

Bad credit, on the other hand, refers to a negative credit history and a low credit score, which is typically below 600. It indicates that a person is considered a high-risk borrower and may have a history of missing payments, defaulting on loans, or declaring bankruptcy. Having bad credit can make it more difficult for a person to obtain credit, and they may be offered credit at a higher interest rate or less favorable terms.

It's important to maintain good credit by making payments on time, not taking on too much debt, and regularly checking your credit report for errors. Building good credit takes time, but it's a worthwhile investment in your financial future.

The best way to find out your credit score is to obtain a credit report from one of the major credit reporting agencies, such as Equifax, Experian, or TransUnion. You are entitled to one free credit report from each of these agencies per year, which can be obtained by visiting AnnualCreditReport.com.

TIPS to build and maintain good to great credit:

Get on your parents credit card as an authorized user! (NOTE: Parents, you don’t need to give them a physical card or allow them access to the account in order for them to benefit.)

Open a credit card that makes sense for you, do your homework. Do a card comparison on a site such as NerdWallet.

PAY YOUR BILLS ON TIME!! Set a calendar reminder to pay your bills or set up auto-payments!

Keep a low balance, pay your monthly balance.

Do not be tempted to open new accounts at retail stores, despite the instant discounts.