What is a good credit score?

A good credit score is typically above 670 for FICO®. If you’re in the market for a credit card, car loan or mortgage, lenders will use this three-digit score to determine your credit risk and consider it in their decision to give you credit.

We know credit can feel intimidating—but knowing how your score is calculated will help you understand how to maintain or even improve it. We’ll break down who determines what a good credit score is, what factors into that figure and how to get that elusive perfect credit score—or at least the highest credit score possible.

What’s considered a good FICO credit score?

If your credit score falls between 670 and 740, congratulations! You have what is considered a good credit score, according to the FICO scoring model.

A score in this credit score range can give you benefits like lower interest rates on loans, more renting options and access to credit cards with lower APRs and more rewards.

What’s considered a good VantageScore?

For lenders using VantageScore, a good score will fall between 661 and 780. While FICO is used more commonly than VantageScore, since VantageScore is affiliated with the three major credit bureaus, it also serves as a reliable metric for creditworthiness.

Credit score range

All FICO and VantageScore credit scores fall between the lowest credit score of 300 and the maximum credit score of 850. Here’s how the scores break down:

Poor credit score: below 580
Fair credit score: 580-669
Good credit score: 670-739
Very good credit score: 740-799
Exceptional credit score: 800 and above

What factors affect your credit score?

There are two main credit scoring systems that lenders model their score after: FICO and VantageScore.Though the former is the most commonly cited score, credit bureaus developed VantageScore in an effort to compete with FICO. Both systems score credit on the same 300-850 scale, but the two differ on how they weigh their individual scoring factors.

Since FICO claims that 90 percent of top lenders use their scoring system, in general, most credit score ranges refer to their method.

What factors affect your credit score?

Even though FICO and VantageScore use the same credit score range, they compute their respective scores using different weighting models of the following metrics:

Payment history (FICO, 35%; VantageScore, 41%): The most important factor for lenders is how regularly you’ve paid past accounts on time.
Amounts owed / utilization (FICO, 30%; VantageScore, 20%): While it helps to use a portion of your credit, using too much of it could signal to lenders that you’re overextended.
Length of credit history (FICO, 15%): This figure includes how long your accounts have been open and how long it’s been since you used each account.
Credit mix (FICO, 10%): While a range of credit types like mortgages, car loans, credit cards and finance accounts is helpful, it’s important that each account you have is managed responsibly.
Age and mix of credit (VantageScore, 20%): VantageScore combines the two above factors into one element.
New credit (FICO, 10%; VantageScore, 11%): Opening too many new accounts in a short amount of time can appear risky to lenders, so they’ll consider how much time passed between the opening of each account.
Balance (VantageScore, 6%): Your overall credit balance plays a small role in determining your VantageScore.
Available credit (VantageScore, 2%): Your total available credit accounts for the smallest amount of weight of any factor.

What factors don’t affect your credit score?

Though many aspects of your financial history affect your credit score, if you’re looking to build credit, these factors will have no direct impact on your score:

Debit card, cash or ACH payments
Marital status
Changes in income
Being denied credit
Interest rates on existing lines of credit
Credit counseling
Soft credit inquiries

However, while none of these will directly change your credit score, they may have significant impacts on other factors that do affect it. An increase in income that leads to using less of your credit limit every month, for example, would lower your credit utilization, which could boost your score.

Why your credit score matters

A good credit score can help you buy a car, find a job, apply for apartments and even buy a house-—but that’s not all. Here are some other ways that a good credit score affects your financial future.

Credit approval: First things first—a good credit score will show lenders that you’re a low-risk borrower, ultimately giving you a higher chance of approval on credit cards and loans.
Lower interest rates: The higher your credit score, the more confidence a lender has in your ability to pay your bills on time. In turn, this will help you qualify for the best interest rates and lower finance charges.
Higher rewards: A high credit score will help you qualify for a number of perks, including credit card rewards and cash back.
Higher limits: A good credit score will help banks trust you to pay your bills on time, making them more willing to offer a higher credit limit.
Rental approval: When you rent a house or apartment, many landlords run credit checks during their tenant screening process. A good credit score gives them more assurance that you will pay your rent on time and will give you a leg up on an applicant with a bad credit score.
Fewer security deposits: Utility companies will often require a security deposit to ensure payment if you don’t pay your bill on time. If you have good credit, it’s less likely that they will request a deposit from you.

How do you get a good credit score?

If you have a bad credit score, don’t worry—it’s not too late to make improvements. Here are a few steps you can take to kick your credit score up a notch (or two).

Always pay bills on time: Since your payment history accounts for 35 percent of your FICO score, missing a payment can have a significant impact on your score. Sign up for online payments and enroll in automatic reminders if your bank or lender offers it to avoid late payments.
Reduce your debt: It may not be as simple as it sounds, but there are ways to strategically reduce your debt. First, focus on paying off debt with the highest interest rates and making minimum payments on those with the lowest interest rates. Additionally, try to pay off revolving debt like credit card debt to show that you can pay off the same amount every month.
Don’t open too many accounts: Although credit mix is a factor in your credit score, it’s unlikely that more accounts will help build your credit score. In fact, opening too many credit accounts quickly will look risky. Only open a credit card if you need it.
Keep credit utilization as low as you can: Avoid spending more than 30 percent of your total credit limit on each account, and ideally lower. For example, if you have a limit of $10,000 on a credit card, try not to carry more than $3,000 on it (less if you can).
Maintain your oldest accounts: Remember that length of credit history carries 15 percent of the weight on your FICO score. This can’t be rushed, so keep your accounts open even if you’re not using them to showcase the age of your credit.

How do I find out my credit score?

There are a few ways that you can see your credit score, but keep in mind that you may actually see different scores when using different services depending on the reporting company they utilize.

Check with your credit card or loan company.
Talk to a credit counselor who provides free credit reports and reviews.
Try a free credit score service.
Remember that you get one free report each year from the three credit bureaus: TransUnion®, Equifax® and Experian®.

Frequently asked questions

What do you do if you don’t have a credit score?

Since credit scores are based on information from your credit reports, if you don’t have a credit history to report on, you may not have a credit score. If you don’t think you have a credit score, you can check your credit report to make sure. To start establishing credit, consider applying for a credit card or becoming an authorized user on someone else’s.

What is a good credit score by age?

While a good credit score is 670 or above, the average credit score for Gen Z is 679, for millennials is 686, for Gen X is 705, for baby boomers is 740 and for the silent generation is 760.

Is 700 a good credit score to buy a house?

A credit score over 670 is considered good and should give you a strong chance of securing a low interest rate on a mortgage.

What’s the perfect credit score?

The perfect credit score is 850. This is the highest possible score you can get, but any score over 800 is considered “exceptional.”

If you’re navigating through your credit report and are unhappy with the credit score you see, don’t be discouraged. Set financial goals for yourself to help increase your score over a long period of time. If you want help with your credit, Narrow Path Consulting will help challenge inaccuracies and monitor your credit on your behalf.

Note: The information provided on Narrow Path Consulting does not, and is not intended to, act as legal, financial or credit advice; instead, it is for general informational purposes only.