Excellent credit is a very valuable asset and easy to achieve. Whether you are seeking a credit card or loan, applicants get better terms and interest rates (as low as 0%) just by having what lenders deem ‘excellent credit’.
So, what exactly is ‘excellent credit’? In my 17 years’ experience researching different elements of the banking and finance industries, I have found that there is no single definition for it. Lenders have their own unique sets of lending standards. The degree of creditworthiness a single lender places on an individual depends on several factors. But generally speaking, individuals that lenders qualify as having excellent credit profiles have: a FICO score of 680 or higher, a lending history of over 2 years, different types of loans in their profile including fixed payment installment loans (such as student, auto, or mortgage loans) and revolving lines of credit (such as credit cards or home equity loans), no delinquent loan payments, a stable income, and a low debt to income ratio.
If you have a stable job, a few loans and/or credit cards, and pay your bills on time, chances are your credit is pretty good… maybe even great. But how can you get excellent credit? Basically the answer is simple: you get excellent credit by ensuring you have an accurate credit report and by being diligent with your finances over a period of time. For example, paying your bills and loans on time is good. Doing so while keeping low balances on your credit cards is good. Maintaining a steady income, while paying your bills and loans on time, and keeping your credit card balances low is good. Doing all of this consistently over the course of 24 months or more… well that’s excellent.
The bottom line is that you have to have an accurate credit report with a personal or tradeline history that shows you are smart with your finances. Do not overextend your income, pay your bills when they are due, be consistent with timely payments, and maintain all of these good habits over an extended period of time. It is definitely worth the diligence it takes to achieve an excellent credit profile. Once you do, you will be able to qualify for all of the really great loan options out there including interest-free promotions and low interest rates that can save you a lot of money over the long term. Help is available for anyone that needs some guidance, assistance, or coaching.