Credit scores can be confusing, especially since there isn’t one single way of understanding your score. While high scores are certainly better, you don’t need to have a perfect score of 850 to be financially healthy. Similarly, there isn’t one specific threshold that makes your score go from being good to being bad. There’s a lot of nuance involved in determining what a good credit score really is.
Banks, credit card companies, and credit bureaus are cargey about exactly how they calculate credit scores, but we have a general idea of where things stand. Anything above 720 is generally considered excellent, and anything above 650 is generally considered good. Scores below 650 but above 600 can usually be considered fair, but when you get below 600 you start to get into “poor” territory - and having a poor score makes borrowing money impossible - or at least extremely expensive.
How do I get a good credit score?
The good news is that getting a good (or even excellent) credit score isn’t very hard - especially if you’re just starting out. Credit scores are determined by five main factors: payment history, credit utilization, length of credit history, new credit, and credit mix. But payment history and credit utilization account for well over half of your score, so let’s take a closer look at those two.
When you get a credit card or take out a loan, the most important thing you can do is make your payments on time and in full. Missing payments is a surefire way to not only hurt your credit score, but rack up tons of debt in the process. While there are other factors that contribute to your score, being responsible with credit (ie payment history) is the thing that is going to have the biggest effect on your score.
Credit utilization is also important, but this factor is bound to fluctuate on a monthly basis based on how much you spend - so try not to worry about it too much. You can check out our deep dive on credit utilization here.
After payment history and credit utilization, the one thing that will help your score more than anything else is time. We know, it’s a frustrating answer. But the longer you have your credit cards open, the better your score will be. It’s one reason why getting started with credit in college is such an important step to take. But with a Fizz card, building credit in college is easier than ever. Plus, you can earn some awesome cash back rewards at places you already love to eat and shop.
Why do I need a good credit score?
Everyone should want a good credit score, but what can a good credit score actually do for you? As it turns out, a good credit score can do a lot of good for you. A lot of people wait until at least their late 20s to start building credit, but building credit in college with Fizz can help you be prepared for everything life throws at you as soon as you graduate - or even before
With a good credit score, you’ll be able to easily rent any apartment you want after you graduate. You’ll also be able to refinance your student loans to pay less than you do now. A good credit score is a huge help when it comes to buying a car, a house, an apartment, or anything that requires a loan. It can help you get new jobs, and it can help you get new fancy credit cards if you’re ready to graduate from your Fizz card one day. Love it or hate it, a good credit score is instrumental in helping you navigate your financial future.
What else is important?
It’s also good to remember that your credit score is a representation of your overall credit profile. While some credit card companies might only look at your score, other lenders are going to take into account your entire credit profile before lending you money. That’s why it’s important to play the long game and remember that being responsible with your finances is the most important thing you can do.
Building your credit score and your credit profile takes time, and you won’t see results right away. But as long as you start building credit early and make your payments on time, you should see positive results over the course of a few months to a year. And the good news is that Fizz makes it easier than ever to start building credit now - without the fees, interest rates, and debt associated with normal credit cards.
To make matters even better, Fizz cards have started shipping out to early members of the waitlist, so don’t wait too long to join. Plus, you can invite your friends to move up the waitlist so that you can get a Fizz card even earlier. Fizz the best decision you can make in college for you finances - so download the app and get your card today!
Sam is a Kenyon College alum and is head of content at Fizz. He's been a go to personal finance resource among his peers since getting his first credit card during his sophomore year of college. He hails from Washington, DC, loves all things aviation, and currently lives in Los Angeles.