Credit scores can be compared to GPAs. A student’s GPA reflects how well someone is doing in school in terms of tests, homework, assignments, and overall grades. You can get into better schools and increase your chances of earning financial accolades, like scholarships, when your GPA is impressive.
Similarly, a credit score shows banks and other financial institutions how well an adult handles their money and their debt. The higher the score, the better the interest rates! As you transition out of your 20’s into your 30’s, it’s common to start looking at buying new cars, purchasing a home, and making larger financial decisions. If that’s you, you might be wondering how your credit stacks up and what you need to do to increase your score.
Let take a closer look at credit scores, why they’re important and what the average credit score for 30-year-olds is!
Table of Contents
What is a good credit score?
Just as a good GPA is a 3.5 or higher, a good credit score is anywhere from 670 and up. Credit scores can range anywhere from 300 to 850. Here is a breakdown of how they are viewed from a creditor’s standpoint!
- Needs improvement: 300-569
- Fair: 570-669
- Good: 670-739
- Great: 740-799
- Excellent: 800+
It takes time to build your credit score. It is rather difficult to get to the 800+ range as it takes years and years of relationship-building with different lenders to gain that trust, but it is possible.
Check out this article to learn more about the differences between good and bad credit scores!
Why is a healthy credit score important?
A healthy credit score is more important than you think. If you are a fan of saving money, then you’ll also want to have a good credit score. You will be able to borrow more money from banks at lower rates, and that’s only the beginning.
A good credit score will also show creditors that you are trustworthy and responsible with money. It shows them that you know how to pay back the money you borrow and use it wisely.
If you’re looking into ways to increase your credit score, try the Credit Builder Plus membership with MoneyLion. You’ll be able to check the status of your finances from the bank’s perspective whenever you want, and this will help you build your credit score and align with what financial institutions expect from borrowers.
What the average credit score?
We all wonder how we compare to others in regard to our credit scores. Below is a table showing average credit scores based on age.
Average credit score by age
|Years of Age||Average Credit Score|
4 key credit moves for 30-year-olds
Here are four key credit moves for 30-year-olds that will help them boost their credit scores. If you follow these suggestions, you could potentially increase your credit score within three months with ease.
1. Never miss a payment
It might sound easy to never miss a payment, but it is not always that simple. Millions of Americans have a delinquent status regarding their credit cards because they have had trouble making their monthly payments.
It’s a feature that makes it possible for people to avoid missing payments and causing damage to their credit score in response. When your credit score drops, you’ll find yourself on a long road to recovery, so preventative measures are key.
2. Start early
Your credit score is largely impacted by the age of your credit. The earlier you start building your credit, the better. For example, starting as soon as you turn eighteen is the best possible scenario.
Banks and lenders will be able to look at a longer credit history, which gives them a better idea of how you’ve managed your credit over the years. This will increase your chances of being approved for a loan and securing a low-interest rate.
You can start building your credit by opening a credit card, buying a car, or taking out a small personal loan. Building credit is the process of borrowing money from a creditor, so even when you do not need to borrow money, doing so anyway is how you can get started with your credit-building process.
3. Limit new accounts
A new credit line must go through a testing phase before it can be established. The creditor will often check your credit score via a hard inquiry. This means that they will dig into your credit score to understand why your score is the way it is. This is when they will determine if you are a good or a bad borrower.
Your credit score will often drop after your credit is checked. This will happen every time you apply for new credit. Scores can have a difficult time increasing if new credit inquiries happen every few months, so be cautious of how frequently you allow your credit score to be checked with a hard inquiry.
Need a new bank account? Set up a new RoarMoney account in minutes, no hard credit check, and access to an instant virtual debit card!
4. Shop around
Mortgage loans are a great example of why it’s important to shop around for different lenders and different rates. Once you allow a financial institution to check your credit for the purpose of securing a mortgage, you’ll have 45 days to get multiple credit checks from different lenders without any penalties.
You can allow as many inquiries as you want, and none of those hard credit checks will impact your score. The first credit check will, but not the ones after that.
Your repayments will play a huge role in whether you accept a loan as well. It’s important to shop around in order to find the best offer in terms of your monthly payment and interest rate.
For example, let’s say Sandra is buying a home and needs a loan for $300,000. One creditor offers her an interest rate of 3% while another one offers her a 2.75% interest rate instead.
The loan with a 3% interest rate will yield a monthly payment of $1,528 while the loan with a 2.75% interest rate yields a monthly payment of $1,488. That 0.25% discrepancy is the difference of $40 per month, or $480 per year, which is $14,400 over the course of a thirty-year loan.
As you can see, it pays off to spend time shopping around and speaking with different lenders to find the lowest interest rate!
Be a good student
You can follow the four steps of building credit by never missing a payment, starting early, limiting your desire to open new accounts, and shopping around with different creditors. By following these four steps, you will be a good student in the credit score world and eventually receive a high credit score, equivalent to a 4.0 GPA.
Start building your credit score by applying for MoneyLion’s Credit Builder loan! We report payments to all 3 credit bureaus and can help you prove to lenders that you’re a responsible borrower. With a Credit Builder Loan, you could see an increase up to 60 points within 60 days–while borrowing up to $1000!