What Is a Good Credit Score? Credit Score Ranges Explained

Credit Score Ranges

Credit scores typically range from 300 to 850, with higher scores indicating better creditworthiness. Here's how FICO categorizes different score ranges:

Exceptional (800-850)

Consumers in this range are considered extremely low-risk borrowers. They qualify for the best interest rates and highest credit limits. Only about 21% of consumers have scores in this range.

Very Good (740-799)

Scores in this range are above the national average and demonstrate dependable credit behavior. You'll qualify for better-than-average rates on most products.

Good (670-739)

This range is near or slightly above the U.S. average. Most lenders consider this an acceptable score, though you may not get the very best rates.

Fair (580-669)

Scores in this range are below average. You may still qualify for credit, but you'll pay higher interest rates and may face restrictions.

Poor (300-579)

Scores in this range indicate high risk to lenders. You may be denied for many credit products or require secured cards and higher deposits.

FICO vs. VantageScore

The two main credit scoring models are FICO and VantageScore. While both use similar ranges (300-850), they calculate scores differently.

What Affects Your Credit Score

FICO scores are calculated from five main factors:

Payment History (35%)

The most important factor. Paying bills on time is critical. Even one late payment can significantly impact your score.

Amounts Owed (30%)

How much you owe compared to your available credit (utilization). Keep credit card balances below 30% of your limits—ideally under 10%.

Length of Credit History (15%)

Longer credit history is better. This includes the age of your oldest account, newest account, and average age of all accounts.

Credit Mix (10%)

Having different types of credit (credit cards, installment loans, mortgage) shows you can manage various credit types responsibly.

New Credit (10%)

Opening many new accounts in a short period can hurt your score. Each application creates a hard inquiry.

Why Your Credit Score Matters

Your credit score affects many areas of your financial life:

Interest Rates

A higher score means lower interest rates. On a mortgage, this can save you tens of thousands of dollars over the life of the loan.

Loan Approvals

Better scores mean easier approvals for mortgages, auto loans, personal loans, and credit cards. Poor scores may result in denial.

Insurance Premiums

Many insurance companies use credit-based insurance scores. Lower credit can mean higher premiums for auto and home insurance.

Rental Applications

Landlords check credit. A low score may require a larger security deposit or result in application denial.

Employment

Some employers check credit for certain positions, especially those involving financial responsibility.

How to Improve Your Credit Score

Focus on these key areas to raise your score:

1. Pay Bills on Time

Set up autopay to never miss a payment. Even one 30-day late payment can drop your score significantly.

2. Reduce Credit Utilization

Pay down credit card balances. Aim to use less than 30% of your available credit—less than 10% is ideal.

3. Keep Old Accounts Open

Don't close old credit cards. They help your credit age and available credit, both positive factors.

4. Limit New Applications

Only apply for credit when necessary. Multiple applications in a short period can hurt your score.

5. Check for Errors

Review your credit reports for mistakes. Errors like incorrect late payments or accounts that aren't yours can be disputed and removed.