Credit Score Basics: What Is a Good Credit Score?

A good credit score ranges from 670 to 739 for FICO, which is the score most commonly used by lenders, and 661 to 780 for VantageScore. This level indicates that you manage credit well, which can help you access credit cards, loans and mortgages with better rates and terms. A strong score may also bring additional perks, like lower insurance rates, smoother approval for rental applications and improved job opportunities in certain fields.

In the U.S., the average FICO score was 715 in 2023, reflecting a solid credit standing for many consumers and positioning them within the "good" credit range. Understanding the factors that impact your score and taking steps to improve it can lead to better financial opportunities, from buying a home to securing lower loan rates.

A credit score is a number that represents your financial behavior and ability to manage credit card debt. It is calculated based on factors like payment history, debt levels, length of credit history and mix of credit types. Various entities use this score to evaluate your creditworthiness and determine how likely you are to repay loans and manage financial responsibilities.

Your credit score affects applications for credit lines, mortgages, car loans and other financial products, as well as situations like renting or employment that involve financial evaluation. A higher score can lead to better terms, lower interest rates and significant savings.

Different groups may use your credit score to evaluate your reliability and financial behavior. Here’s who checks your score and what they look for:

• Banks and Financial Institutions use your score to determine eligibility for loans, credit cards and mortgages. Strong credit can lead to favorable terms, including lower interest rates and fees.
• Landlords check your score to assess reliability as a tenant. Demonstrating good credit can help you avoid a co-signer requirement or reduce the size of your security deposit.
• Employers may perform an employment credit check to gauge trustworthiness for roles with financial responsibility. This is particularly relevant in sectors that handle sensitive data or manage funds, where your credit history can signal reliability.
• Insurance Companies use a credit-based insurance score when setting auto and home insurance premiums. Poor credit history might mean higher premiums or stricter policy conditions.
• Utility Companies and Service Providers review your score to decide on deposits or service terms. With a solid credit record, you might enjoy reduced deposits or quicker service setup.

A good FICO score ranges from 670 to 739. This score tells lenders you are a low-risk borrower, making it easier to qualify for loans, credit cards and mortgages with favorable terms and interest rates.

A FICO score is a number between 300 and 850 that reflects your creditworthiness based on your credit history. Lenders use this score to assess how likely you are to repay borrowed money. Generally, a higher FICO score improves your chances of credit approval and access to lower interest rates.

Each range of FICO scores reflects a different level of creditworthiness. Here is a breakdown of the different FICO score ranges and what they mean for your borrowing potential:

A good VantageScore score falls between 661 and 780, suggesting to lenders that you are a reliable borrower who can handle credit responsibly. This score range generally qualifies you for credit products like loans and credit cards at reasonable terms, though it may not always secure the lowest rates.

Unlike FICO, the VantageScore model is designed to be more inclusive, assessing creditworthiness even with limited credit history. Developed by the three major credit bureaus — Equifax, Experian and TransUnion — it aims to offer a unified view of your credit profile. In addition to your score, lenders may also consider your income, employment status and overall financial situation when making lending decisions.

Credit scores are grouped into different categories that represent varying levels of credit risk. Below is an overview of VantageScore ranges and what they generally imply for your ability to borrow:

To qualify for major purchases like homes, cars and personal loans, you typically need a credit score of 620 or higher, with better rates and terms available to those with scores above 700. Know these requirements to plan and improve your chances of securing the best deals.

There are many ways to monitor your credit score. You can start by contacting your credit card provider, using a credit score service or requesting a report directly from credit bureaus to stay up-to-date with your credit information.

Many credit card issuers offer free credit score monitoring to their customers. You can often find your score through your online account, mobile app or by contacting customer service.

Sources: American Express, Bank of America, Credit Wise, Chase

Credit monitoring services, such as Experian Boost, provide free access to your credit score and additional tools to help you understand it better. These platforms may offer insights, alerts for changes and suggestions for financial products.

You can request your credit score directly from the three major credit bureaus: Equifax, Experian and TransUnion. Each bureau may provide a slightly different score, so it's helpful to check all three. You can obtain a free credit report from each bureau once a year through AnnualCreditReport.com.

A nonprofit credit counselor can help you interpret your credit score, create a debt management plan and offer advice on improving your credit. While some services may have fees, many organizations provide free or low-cost counseling to those who qualify.

Your credit score is influenced by factors like payment history, length of credit history, credit mix and credit utilization ratio, all of which reflect your financial responsibility and ability to manage debt effectively.

Improving your credit score begins with understanding your starting credit score and taking steps like paying down debt, negotiating with lenders and reporting your monthly bills. Focus on these key strategies to gradually raise your score and access better financial opportunities.

Knowing the factors that impact your credit score is key to making smart financial decisions. Find clear answers to common credit score questions below.

Find more MoneyGeek resources on credit and personal finance. These guides cover everything from reading credit reports to improving your score, offering practical insights for all financial situations.