Navigating the world of credit can be tricky, and many consumers wonder, “What is a good credit score?” Typically, a good credit score is defined to be 670 and above with FICO and 661 and above with VantageScore. While credit scores provide an easy, consistent way for lenders to determine the risk of doing business with you, there’s a lot that goes into building and maintaining a good credit score.
On this page
- What is a good FICO Score?
- What is a good VantageScore?
- What impacts your credit score?
- Why a good credit score is important
- How to get a good credit score
- How to check your credit score
- Frequently asked questions
What is a good FICO Score?
FICO Scores range from 300 to 850. They serve as a way to evaluate the risk a lender will take in extending credit to you. The more likely you are to pay on time, the higher your FICO Score will be.
In the United States, 90% of lenders use FICO Scores to evaluate new financing applications. Some lenders use VantageScore credit scores as well, a competing credit score brand created by the three major credit reporting agencies.
Just as beauty is in the eye of the beholder, the interpretation of your FICO Score depends on who you ask. In general, a FICO Score of 670 or above typically qualifies as “good.” If your FICO Score climbs to 740 or higher, it’s “very good,” and FICO Scores in the 800-850 range are “exceptional.”
FICO Score Ratings
What is a good VantageScore?
VantageScore is a credit-scoring company that is generally considered to be FICO’s chief competitor. While FICO is still the industry leader, it’s worth paying attention to your VantageScore credit score, too. Over 2,600 companies use VantageScore credit scores to evaluate creditworthiness.
Like FICO Scores, VantageScore features a score range of 300 to 850. A VantageScore of 661 or higher is usually considered a good score, while anything 781 and up may be deemed as excellent.
What impacts your credit score?
Your credit score is calculated based on the information in your credit reports from the three major credit bureaus: TransUnion, Experian or Equifax.
Understanding the scoring factors can help you determine the actions that could impact your score, and what you can do to improve your credit.
The general categories examined when calculating your score are:
- Payment history (35% of your FICO Score): On-time payments are the most important factor in determining your credit score. Late payments, bankruptcies, foreclosures and other indications that you don’t pay your bills on time will hurt your score.
- Current credit use or credit utilization ratio (30% of your FICO Score): Using only a small portion of your available credit can help your score, while maxing out credit cards can lead to a lower score. Financial experts recommend not using more than 30% of your available credit at any time.
- Length of credit history (15% of your FICO Score): Having a lengthy credit history with a high average age of accounts could help your score. Generally, the longer your credit history, the better your score.
- New credit (10% of your FICO Score): Opening a new account could help your current credit use and payment history, if you make on-time payments and keep your credit utilization rate low. But applying for or opening too many accounts in a short period of time will hurt your credit score, as each hard inquiry negatively impacts your credit score.
- Types of accounts or credit mix (10% of your FICO Score): Showing that you can responsibly handle different types of accounts, such as credit cards and loans, will positively affect your credit score.
Why a good credit score is important
Building a good credit score can help you in many ways. It could be a requirement for renting a home, and in some states, good credit may lead to lower insurance premiums.
But the biggest benefits of good credit come when you apply for a new loan, line of credit or credit card. Having a high credit score can increase your chances of getting approved, as well as lower the interest rates you’re offered when you borrow money.
Another thing to keep in mind is that increasing your credit score could save you money when applying for new credit.
For instance, in a September 2022 study, LendingTree found that raising your credit score from fair to very good could save you nearly $50,000 in interest charges and fees. This isn’t a lump sum of money — instead, this figure shows the difference in the total cost to borrow for a consumer with a fair credit score and one with a very good score.
How to get a good credit score
Whether you’re brand new to credit, have established credit or you’ve made a few mistakes and are trying to rebuild your credit, the same principles and practices apply to building and maintaining a good score.
Pay your bills on time, every time
Your payment history accounts for 35% of your FICO Score. Having a history of on-time payments shows other creditors that you’ve been responsible in the past. Late payments can drag down your score and make you look riskier to future lenders.
Keep credit card balances low
The current credit use category accounts for about 30% of your FICO Score. A large part of this category depends on your utilization rate — how much of your credit limit you’re using on your revolving credit accounts. A lower utilization rate is better for your score, and if you can pay down debts, your score should rise.
Have a mix of credit accounts
Ten percent of your FICO Score is based on the mixture of account types on your credit report. But you shouldn’t rush out to apply for a mortgage or auto loan just to mix things up. However, adding a credit card or an installment account to a credit report that’s missing these types of accounts may be worth considering in certain situations.
Dispute incorrect information
Unfortunately, it’s not uncommon for incorrect information to show up on your credit report. These mistakes could cause your credit score to drop, so it’s important to dispute credit report errors when you catch them.
Start your credit journey early
If you’re building credit from scratch, it may help to:
- Open a student card
- Open a secured card
- Become an authorized card user
Get help if you need it
If you’re struggling with bills, collection accounts or finances in general, you may want to reach out to a nonprofit credit counseling organization that’s accredited by the National Foundation for Credit Counseling (NFCC). A reputable credit counselor could help you create a manageable budget, offer suggestions for your best next step and may even be able to negotiate a new payment plan with your creditors.
How to check your credit score
In many instances, checking your credit score is free. Here are several ways you can access your credit score at no cost:
Check it withLendingTree
To see your free credit score with LendingTree, you’ll need to create an account (which is also free). Not only will you be able to view your credit score, but you can also receive advice on savings and credit.
Go through your bank
Your bank may offer you free monthly access to your credit score as a customer service benefit. For example, if you have a bank account through Bank of America, Chase, U.S. Bank or Wells Fargo, you may be able to access your credit score through your online customer portal.
Ask your credit card company
Credit card issuers often offer free credit scores to cardholders, but some offer them to the general public as well. At Discover, cardholders can access their FICO Score for free online with a Discover card, but Capital One offers a free VantageScore 3.0 with CreditWise to everyone. American Express also released MyCredit Guide and Score Goals, which offers a free VantageScore 3.0.
Check with the credit bureaus
You can get your credit score from all three credit bureaus. Visit Experian online to access a free copy of your FICO Score. The other two major credit bureaus, Equifax and TransUnion, also offer free credit scores. For Equifax, you’ll have to enroll in Equifax Core Credit to get your free monthly VantageScore 3.0. TransUnion also provides Vantage 3.0 updates.