Recent research suggests that 60% of Americans don't know their credit scores, according to LendingTree.
This is astounding knowing that your credit score is one of the most important numbers in your financial life. Short of the eventual size of your nest egg, there may be no more important financial number. Excellent credit is the gateway to the lowest loan and mortgage rates and some of the best credit card offers, including our picks of the best credit cards for excellent credit.
In the video segment below, The Motley Fool analysts Hamilton Hamilton and Michael Douglass talk more about credit scores and highlight what score will land you in excellent territory.
Michael Douglass: Hamilton, let's talk about credit scores. We talk a lot on fool.com about how to boost your credit score, how to think about your credit, but let's just ask you the basic question. What is an excellent credit score, like what does that mean? What number is that? Give us a grade.
Nathan Hamilton: Yeah. If you are to essentially etch it in stone of what is an excellent credit score, per FICO score, that is going to be 750 plus. Now, it's important to put this in context because you have more than one credit score. FICO score is the overwhelming industry standard. Banks use it to make a decision on mortgages, credit cards. All various parties use it to assess you as a borrower, but There are a bunch of other scores out there, be it VantageScore. There are other models of VantageScore.
There are proprietary free scores that have different ranges, so it's really important to look at it and say, "Okay, what's my FICO score?" The other ones may have a different range, and 750 may mean something different. It could be prime, prime credit or it could be average, could be good, so just pay attention to the details there.
Douglass: Absolutely. Fortunately, we have a lot of good information for thinking about your credit score, thinking about debt, and also for that matter, I mean, what credit cards you can have access to if you have-
Douglass: A really good credit score or if it's not so great. At fool.com/creditcards, there a lot of good information there, including a free guide, Five Tips to Increase your Credit Score over 800's.
Hamilton: Into the very excellent category.
Douglass: Yeah, which is, I mean, again, 750 is excellent. 800 is like way up there, so.
Hamilton: Yeah. Pretty much.
Douglass: Something to consider. Again, check us out, fool.com/creditcards. Thanks.