DEFINITION of 'Good Credit'

A qualification of an individual's credit history that indicates that the borrower is a safe credit risk. A high credit score is an indicator of good credit, while a low credit score indicates bad credit. An individual's credit history is dependent on a number of factors, including the amount borrowed, the amount of available credit remaining and the timeliness of payments.

BREAKING DOWN 'Good Credit'

Credit rating agencies assign a score to an individual's credit rating, but this number may vary according to the methodologies used in calculating the credit score. Having good credit makes it easier to obtain loans, such as mortgages, and allows the borrower to obtain a more favorable interest rate. The most commonly used credit score is the FICO Score.

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RELATED FAQS
  1. What's the difference between credit score and credit history?

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  2. What are the biggest factors that can affect my credit score?

    A credit score is a numeric expression that helps lenders estimate the risk of extending credit or loaning money to people. ... Read Answer >>
  3. Why don't I have a credit score?

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  4. Will having several credit cards hurt my credit score?

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  5. Is it possible to have a credit limit that's too high?

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