When Simone Griffin was young, she would watch her grandmother pay the bills on the first of every month. â€śMy grandmother would talk to me about the importance of saving, paying bills on time, and monitoring spending,â€ť the Atlanta-based executive director for homeownership organization HomeFree-USA says. Those conversations paid off, as Griffin now has an 801 credit score. â€śCredit is a barometer of my goal of building wealthâ€”it tells me if Iâ€™m on the right path,â€ť she says.
Griffin, 33, paid off all her consumer debts last year. She also surrounds herself with people whose values are similar to hers, such as her friend Jade Brawley, a Washington, D.C.-based schoolteacher who is working to improve her credit score, which is in the mid-700s. â€śBefore I make a purchase, I plan for how Iâ€™m going to pay it off,â€ť says Brawley, 32. For Griffin, having someone mirror her own money-management philosophy motivates her to reach her financial goals.
Achieving A+ credit can pay off in the form of lower interest rates, faster loan decisions, and easier access to capital. The most widely used credit score is Fair Isaac Corp.â€™s FICO score, which ranges from 300 to 850. â€śExcellent credit is whatever credit score is necessary to get the best deal that a lender has to offer,â€ť says John Ulzheimer, president of consumer education at credit monitoring website SmartCredit.com. That number can vary not only by lender, but according to the type of loan a consumer is applying for. For example, lenders awarding 30-year fixed-rate mortgages might consider a 760 FICO score to be A+, while those offering 36-month auto loans might consider a consumer with a 720 score or above to have excellent credit, says Barry Paperno, consumer operations manager for myFICO.com. Currently, youâ€™ll likely qualify for the best rates for any type of big-ticket purchase if you have a score of about 760 or above, experts say.
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