What is a good credit score?

Credit scores are used to predict how likely a person is to pay their loans and credit card bills on time. That’s simple enough. But trying to explain what a good score is can be more difficult. 

If you’re just looking for a quick answer, it’s probably best to start with credit-scoring companies FICO® and VantageScore®, which produce some of the most commonly used credit scores. 

But there’s a lot more to it than that. So keep reading to take a closer look at credit scores, including how they’re determined, who’s looking at them and what you can do to monitor and improve yours.

Key takeaways

  • Most people have more than one credit score, which vary based on how they’re calculated, when they’re calculated and what information is used to calculate them.
  • FICO and VantageScore are two popular credit-scoring companies.
  • Scores from FICO and VantageScore typically range from 300 to 850.
  • FICO says good credit scores fall between 670 and 739; VantageScore says good scores fall between 661 and 780.

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Good credit basics

According to the Consumer Financial Protection Bureau (CFPB), credit scores are based on information from your credit reports. And they’re calculated by credit-scoring companies like FICO and VantageScore using complex formulas called scoring models.

FICO considers a good credit score anything between 670 and 739. And VantageScore says good credit scores fall between 661 and 780. Anything above that might be considered very good, excellent or exceptional. 

Ultimately, lenders, like credit card issuers or banks, determine for themselves what they consider a good credit score. One way they might do that is by using credit scores to gauge a borrower’s creditworthiness. But there’s a lot more to it than that.

The following video explains a little more about how credit works:

Why are there different credit scores? 

Credit-scoring companies use different models to calculate credit scores. So what FICO and VantageScore consider to be “good” credit can vary. And models might weigh information in credit reports differently as part of their calculations. That’s why your scores are likely to vary—even if just by a few points—when you compare them.

What is good credit?

A good credit score depends on where a score comes from, who calculates it and who’s judging it. Remember, lenders may set their own credit policies and standards to determine creditworthiness. That means that what FICO, VantageScore or anyone else considers good may not be the same.

But there are some general guidelines for how being within a score range can impact your choices:

  • A poor to fair credit score could make it more difficult to qualify for many credit cards and loans. You might need to start with a secured credit card or credit-builder loan to build or rebuild your credit. And if you do qualify for an account, you may have to pay high fees and interest rates if you don’t pay your balance in full each month. 
  • A fair to good credit score may qualify you for more options, but you won’t necessarily receive the best rates or terms. You also might find you can qualify for a traditional unsecured credit card but have a harder time qualifying for a premium card. 
  • A very good or excellent credit score could qualify you for the best products with the lowest advertised rates. While creditors consider other factors when determining your eligibility and rates, your credit score likely won’t be what’s holding you back. 

What’s a good FICO credit score range?

Established in 1989, Fair, Isaac and Company (FICO) helped standardize credit scoring. In the 30-plus years since, FICO has created multiple versions of its scoring models. But according to FICO, “the various FICO score versions all have a similar underlying foundation, and all versions effectively identify higher risk people from lower risk people.” 

FICO classifies scores between 670 and 739 as good. Scores in that range are near or slightly above the U.S. average credit score. In total, FICO breaks its scores into the following five categories:

Graphic of the range of FICO credit scores from poor to exceptional.

Source: MyFICO.com

  • Exceptional: 800-850
  • Very good: 740-799
  • Good: 670-739 
  • Fair: 580-669
  • Poor: less than 580

FICO also has consumer credit scores tailored to different industries, such as auto and mortgage lending. These scores and scoring categories may vary from the scores above.

What’s a good VantageScore credit score range?

VantageScore entered the picture in 2006. It’s managed independently, but it was founded by the three major credit bureaus: Equifax®, Experian® and TransUnion®. 

Credit card issuers and other lenders may rely on VantageScore credit scores in addition to FICO scores to judge loan or credit applications. 

When it comes to VantageScore, scores between 661 and 780 are considered good. VantageScore also breaks its scores into five groups but uses different ranges and category names than FICO:

Graphic of the range of VantageScore credit scores, from very poor to excellent.

Source: VantageScore.com

  • Excellent: 781-850
  • Good: 661-780
  • Fair: 601-660 
  • Poor: 500-600
  • Very poor: 300-499

What affects your credit scores?

Credit-scoring models and credit reports are two big factors that determine your credit score. But if you don’t know what information from your credit report is being used, it’s not much help. 

Here are a few factors the CFPB says make up a typical credit score:

  • Payment history
  • Debt
  • Credit utilization rate
  • Loans 
  • Credit age
  • New credit applications

Learn more about what affects your credit score

What factor has the biggest impact on a credit score?

FICO and VantageScore weigh factors differently. But FICO is pretty specific about what it views as the most important credit factors. Here’s a list of how it ranks them:

  • Payment history: roughly 35%
  • Total debt: roughly 30%
  • Length of credit history: roughly 15%
  • Credit mix: roughly 10%
  • New credit: roughly 10%

These percentages can vary depending on what’s in your credit report, but they’re a good general guide. VantageScore doesn’t give percentages. But it is clear about what’s crucial to its scoring models. Here’s a list of how it ranks credit factors: 

  • Credit utilization: extremely influential 
  • Credit mix and experience: highly influential
  • Payment history: moderately influential 
  • Credit age: less influential
  • New credit: less influential

What doesn’t affect your credit scores?

Most credit-scoring models don’t consider certain information unless it’s part of your credit report. And even then, some parts of your credit report won’t impact your scores. FICO’s and VantageScore’s scoring models don’t consider:

  • Your age, race, nationality, color, sex, gender or marital status
  • Where you live and work
  • Your income, your job or whether you’re employed 
  • Whether you receive public assistance
  • Political or religious affiliations 
  • The interest rates on your credit accounts
  • Soft credit inquiries

Closed and paid-off accounts will stay on your credit reports and can continue to impact your scores until they fall off.

How to build a good credit score

Building good credit scores comes down to using credit responsibly over time. The same is true when it comes to maintaining a good credit score. Here are five things the CFPB says you can do:

  1. Pay your bills on time. To meet this goal, consider setting up automatic payments or electronic reminders to help you remember payment due dates.
  2. Stay below your credit limit. Experts recommend keeping your credit use below 30% of your available credit—across all your credit card accounts.
  3. Keep an eye on your credit history. Showing responsible credit habits over a long period can help your credit scores.
  4. Apply only for the credit you need. If you apply for multiple credit cards and loans over a short period of time, lenders may think your financial situation has changed for the worse.
  5. Check your credit reports. Because your credit scores are based on the information in these reports, errors can hurt your credit scores. 

How to get a free credit score

Monitoring your credit can help you detect fraud and track your credit scores. 

One way to do this is by using a free credit tool like CreditWise from Capital One, which shows your TransUnion credit report and VantageScore 3.0 credit score. You can also learn how to get free copies of your credit reports by visiting AnnualCreditReport.com.

Credit score FAQ

These frequently asked questions about credit scores might help if you still have questions.

There are a number of products to help customers who may be new to credit or are trying to rebuild their credit. Many people start with a secured credit card, student credit card, credit-builder loan or student loan.

There’s no specific credit score needed to buy a car. But auto loans will generally be more favorable when you have a good credit score. A good credit score can also result in better loan terms. For instance, higher credit scores could help you get lower interest rates and a lower down payment.

Having a good credit score can also make it easier to buy a house and get better loan terms. 

Conventional loans require a minimum credit score of 620, but a higher credit score could help you secure a lower interest rate, make a lower down payment and potentially save on private mortgage insurance. 

Government-backed loans from the Federal Housing Authority or Department of Veterans Affairs may have modified credit guidelines, but good credit could still help get you the best possible terms.

Building good credit can take time, but there are steps you can take to help improve your credit scores. If you have a high credit utilization ratio that’s hurting your credit scores, paying down your revolving credit account balances might quickly improve your scores. Or if there’s incorrect negative information in your credit report, disputing the error and getting it corrected right away could help. 

Good credit scores in a nutshell

Using credit accounts responsibly and paying your bills on time can help you establish credit and lead to good—and even very good or excellent—credit scores. And avoiding late payments and having low credit card balances could also help you maintain good credit

Once you start monitoring your credit, you can also set goals for yourself and aim for even higher credit scores. And if you want to keep learning, explore what it means to have an excellent credit score.

Louis DeNicola, contributing writer

Louis DeNicola is a freelance writer who specializes in consumer credit, finance and fraud. He has several consumer credit-related certifications and works with lenders, publishers, credit bureaus, Fortune 500s and FinTech startups. Outside of work, you can often find Louis at his local climbing gym or cooking up a storm in the kitchen.

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