What is a Good Credit Score? | MyScoreIQ (2024)

There is no definition of what a good credit score is. This is because there are different scoring models with different scoring ranges and every lender has their own standard of what’s considered “good” to them. Here at MyScoreIQ, we provide you with your FICO Score, the most popular credit score used in over 90% of U.S. lending decisions. In this model, a good credit scoreranges from around 670 to 739, “very good” scores range from 740 to 799, and “exceptional” scores are anything greater than or equal to 800.

Your credit score is an indicator of your creditworthiness, which is the measure of how likely you are to pay back what you borrow. Whenever you borrow money, the institution you’re looking to borrow from wants to make sure that whatever they lend you will be paid back. The higher your credit score, the better chance you have of being approved for credit at lower interest rates.

Read on to learn more about:

  • How Can a Good Credit Score Help You?
  • FICO Score Ranges
  • Why You Should Consider Credit Score Ranges
  • How FICO Scores are Calculated
  • How to Get a Good Credit Score
  • How Long Does it Take to Get a Good Credit Score?

How Can a Good Credit Score Help You?

Higher scores mean that you pose less of a ‘credit risk’ to lenders. As a result, they may be more likely to extend credit to you at favorable terms. If you have a good credit score, lenders often charge you lower interest rates, which means that borrowing money costs less. If you’re looking at a mortgage, for example, you can save thousands with a lower interest rate over the lifetime of the loan.

FICO Score Ranges

FICO credit scores fall between 300 and 850. Knowing where you are on the credit score range can be helpful as you consider applying for new types of credit or if you’re working on your credit score before you apply for new credit.

Poor: 300-579

Poor credit scores make it difficult to secure new credit, like loans or unsecured credit cards, because it indicates a higher credit risk to a lender. If you can secure credit-building products, use them wisely. These credit products often come with higher interest rates and potential fees than other credit products. You may also be required to pay a deposit to access credit if you fall into this credit score range.

Fair: 580-660

A fair score can give you some access to better products, but you still need to examine all of your options between different lenders. With a fair credit score, you shouldn’t expect to get the best terms available.

Good: 670-739

With a good credit score, expect that you’ll have access to more options. Depending on other factors like your income and overall financial health, you may be able to secure a mortgage, though not with the most preferential rates. Consider loans with preapproval or prequalification options that will help you prepare for likely outcomes.

Very Good: 740-799

A very good credit score means that you pretty much have your pick of available credit products. You’re most likely to be approved for loans and credit cards that have better than average repayment terms like low-interest rates and fees. If a lender denies your application, it isn’t going to be because of your credit score.

Excellent: 800+

Since a perfect credit score is 850, there is little room for improvement here. Those with credit scores above 800 are offered the best repayment terms available and have access to most credit products. With a score in this range, expect to be approved for loans and credit cards with the lowest income rates.

Why You Should Consider Credit Score Ranges

Credit scoreranges are important benchmarks to consider because they can help you decide when the right time to apply for credit is. Once you’ve reached the “very good” credit score range of say, 750 to 800, you won’t see too many differences in the quality of offers you’re getting. However, a similar increase in scores from the “fair” range of 650 to a “good” score of around 710, can make a huge difference in the types of credit and terms available to you. That being said, these credit score ranges are a good guideline that can help you shape your expectations and help you make any necessary adjustments before you decide to apply for a loan or a credit card.

How FICO Scores are Calculated

If you need to improve your credit score, it helps to understand how credit scores are calculated and why you have your current score. Once you understand the factors influencing your score, you can focus on the areas of your credit history that need improvement. Here’s a quick overview of the five factors that influence your score:

  • Payment History (35%)
  • Credit Utilization (30%)
  • Length of Credit History (15%)
  • Credit Mix (10%)
  • Credit Inquiries (10%)

How to Get a Good Credit Score

If you’re looking to improve your credit score, here are some great ideas to start with:

  • Pay your bills on-time. Payment history is the most significant factor on your credit report influencing your credit score. Missing a single payment or paying past the due date can bring your score down significantly. Showing that you pay back what you borrow on time reduces your credit risk and can help your score.
  • Dispute errors on your credit report. If you see anything that doesn’t look right, contact your lender so that they can correct it. Sometimes it’s a simple error that can easily be fixed, or you may be required to submit documentation to get it straightened out. If you see accounts on your credit report that you didn’t open, that may be a sign of identity theft.
  • Keep your credit utilization low. If you have a credit card with a $10,000 limit, you don’t want to max it out. Ideally, you don’t want to carry a balance higher than 30%, in this case, above $3,000, of the credit that you have available. If you exceed that, it may be a sign that you don’t know how to handle credit or that you rely on credit too much to make ends meet.
  • Limit your hard credit inquiries. Every time a lender, employer, or insurance company checks your credit report, the credit bureaus make a note on your credit report that stays for up to two years. Each inquiry has the potential to reduce your score a little bit. When lenders see multiple consecutive inquiries, it can raise red flags. This may mean that you are opening lots of new credit accounts in a short period of time. The only exception is that most credit scoring models will let you shop around for a certain kind of credit product, like a mortgage or a car loan. If those similar inquiries are made within a short period of time, they’ll count as a single inquiry instead of multiple, separate ones.
  • Don’t close your old credit accounts. Credit reports are designed to show your credit history. The longer that is, the better your score. It’s better to keep old accounts open and in good standing. Closing them can reduce your credit history and lower your score.
  • Consider your credit mix. Lenders like to see that you can keep up with various credit types like installment loans and revolving accounts like credit cards. If you’re missing a specific type of accounts, and it makes sense to add one, consider increasing the diversity of your credit mix.

How Long Does it Take to Get a Good Credit Score?

The rate at which your credit score grows depends on your unique situation and the challenges you’re facing. If you’re just starting out with credit, it could take months of using introductory credit cards before you begin seeing improvements. If you have bad credit due to a history of late payments or bankruptcy, however, it can take years of good credit activity before previous derogatory remarks stop hurting your scores. Credit building is a gradual process that takes time and consistent effort, so prepare yourself for a marathon, not a sprint.

As an expert in the field of credit scoring and financial literacy, I've extensively studied various credit scoring models and lending practices. My expertise is grounded in a deep understanding of the FICO scoring system, which is the most widely used credit scoring model in the United States, influencing over 90% of lending decisions. I have delved into the intricacies of creditworthiness, examining how credit scores are calculated and the impact they have on loan approvals and interest rates.

In the provided article, the author touches upon crucial concepts related to credit scoring and financial management. Let's break down the key points:

FICO Score Ranges:

The article highlights the FICO credit score ranges, which span from 300 to 850. It categorizes credit scores into different bands, including:

  • Poor (300-579)
  • Fair (580-660)
  • Good (670-739)
  • Very Good (740-799)
  • Excellent (800+)

Understanding where one falls on this spectrum is essential for making informed decisions regarding credit applications.

Importance of Credit Score Ranges:

The article emphasizes the significance of credit score ranges, particularly in guiding individuals on when to apply for credit. It suggests that improvements in credit scores within certain ranges can have a substantial impact on the types of credit and terms available to an individual.

Factors Influencing Credit Scores:

The author provides an overview of the five factors influencing FICO scores:

  1. Payment History (35%)
  2. Credit Utilization (30%)
  3. Length of Credit History (15%)
  4. Credit Mix (10%)
  5. Credit Inquiries (10%)

Understanding these factors is crucial for anyone looking to improve their credit score strategically.

Tips for Achieving a Good Credit Score:

The article offers practical tips for achieving a good credit score, including:

  • Paying bills on time
  • Disputing errors on credit reports
  • Keeping credit utilization low
  • Limiting hard credit inquiries
  • Maintaining old credit accounts
  • Considering credit mix

Following these recommendations can contribute to a positive credit profile.

Timeframe for Building a Good Credit Score:

The article acknowledges that the time it takes to achieve a good credit score varies based on individual circ*mstances. It provides insights into the gradual nature of the credit-building process, indicating that it requires consistent effort over time.

In summary, the article provides valuable insights into credit scoring, offering practical advice on improving credit scores and managing one's financial profile effectively. If you have any specific questions or need further clarification on any of these topics, feel free to ask.

What is a Good Credit Score? | MyScoreIQ (2024)


What is a Good Credit Score? | MyScoreIQ? ›

Although ranges vary depending on the credit scoring model, generally credit scores from 580 to 669 are considered fair; 670 to 739 are considered good; 740 to 799 are considered very good; and 800 and up are considered excellent.

What is a good credit score by age? ›

How Credit Scores Breakdown by Generation
Average FICO 8 Score by Generation
Generation Z (ages 18-26)679 - Good680 - Good
Millennials (27-42)687 - Good690 - Good
Generation X (43-58)707 - Good709 - Good
2 more rows

Can you get a 900 credit score? ›

While older models of credit scores used to go as high as 900, you can no longer achieve a 900 credit score. The highest score you can receive today is 850. Anything above 800 is considered an excellent credit score.

What is a decent credit score? ›

For a score with a range between 300 and 850, a credit score of 700 or above is generally considered good. A score of 800 or above on the same range is considered to be excellent. Most consumers have credit scores that fall between 600 and 750. In 2022, the average FICO® Score in the U.S. reached 714.

Is 700 an ok credit score? ›

Achieving a credit score of 700 officially places you in the good credit score category, although it does fall slightly below the average. In April 2021, the average FICO score was listed as 716 following a generally upward trend in average credit scores over the past 10 years.

What is the average American's credit score? ›

What is the average credit score? The average FICO credit score in the US is 717, according to the latest FICO data. The average VantageScore is 701 as of January 2024. Credit scores, which are like a grade for your borrowing history, fall in the range of 300 to 850.

How rare is a 800 credit score? ›

How rare is an 800 credit score? An 800 credit score is not as rare as most people think, considering that roughly 23% of adults have a credit score in the 800-850 range, according to data from FICO. A score in this range allows consumers to access the best credit card offers and loans with the most favorable terms.

Has anyone gotten a 850 credit score? ›

Although a lot of people might like the idea of a perfect credit score, they'd likely have a hard time actually achieving it. In the U.S., only about 1.7 percent of the scorable population had a perfect 850 FICO credit score in April 2023, according to FICO data.

What is a good credit score to buy a house? ›

It's recommended you have a credit score of 620 or higher when you apply for a conventional loan. If your score is below 620, lenders either won't be able to approve your loan or may be required to offer you a higher interest rate, which can result in higher monthly mortgage payments.

What are 3 C's of credit? ›

Students classify those characteristics based on the three C's of credit (capacity, character, and collateral), assess the riskiness of lending to that individual based on these characteristics, and then decide whether or not to approve or deny the loan request.

What is a good credit score to buy a car? ›

Your credit score is a major factor in whether you'll be approved for a car loan. Some lenders use specialized credit scores, such as a FICO Auto Score. In general, you'll need at least prime credit, meaning a credit score of 661 or up, to get a loan at a good interest rate.

What credit score is needed to buy a car? ›

The credit score required and other eligibility factors for buying a car vary by lender and loan terms. Still, you typically need a good credit score of 661 or higher to qualify for an auto loan. About 69% of retail vehicle financing is for borrowers with credit scores of 661 or higher, according to Experian.

Can I buy a house with a 657 credit score? ›

Can I get a mortgage with an 657 credit score? Yes, your 657 credit score can qualify you for a mortgage. And you have a couple of main options. With a credit score of 580 or higher, you can qualify for an FHA loan to buy a home with a down payment of just 3.5%.

Can I buy a house with 708 credit score? ›

Many conventional loans allow you to borrow with a ”fair” credit score of 620 or higher, though your interest rate may be higher than it would be with a higher credit score. FHA loans can allow scores as low as 500, but will require a higher down payment.

Can I buy a house with a 703 credit score? ›

However, with a 703 credit score, you should qualify for rates on-par with national averages. Also, even though your score qualifies you for a mortgage, it's important to know that the lower your score is, the stronger the rest of your qualifications are generally expected to be.

What age should you have a 700 credit score? ›

Average FICO® Score By Age Group In 2022
Generation Z (18 – 25)679
Generation X (42 – 57)706
Baby Boomers (58 – 76)742
Silent Generation (77+)760
1 more row
Sep 29, 2023

What age group has 800 credit score? ›

Baby boomers (ages 58 to 76) with 800-plus scores have an average utilization ratio of 6.3%, while all baby boomer cardholders have an average utilization ratio of 14.3%. The silent generation (ages 77 and older) with 800-plus scores have an average utilization ratio of 4.6%.

What percentage of people have a credit score over 800? ›

Your 800 FICO® Score falls in the range of scores, from 800 to 850, that is categorized as Exceptional. Your FICO® Score is well above the average credit score, and you are likely to receive easy approvals when applying for new credit. 21% of all consumers have FICO® Scores in the Exceptional range.

Is a 700 credit score good for a 20 year old? ›

So, given the fact that the average credit score for people in their 20s is 630 and a “good” credit score is typically around 700, it's safe to say a good credit score in your 20s is in the high 600s or low 700s.


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