Generally, the credit bureaus consider anything over 670 a good credit score.
Considering applying for a new line of credit like a mortgage or credit card, but not sure how your credit score stacks up? If your score is 670 or higher, you’re doing fairly well. The best credit score and the highest credit score possible is 850 for both FICO® and VantageScore® models. FICO considers a score between 800 and 850 to be “exceptional,” while VantageScore considers a score above 780 to be “excellent.” It’s possible to get an 850 credit score, but it’s tough to achieve.
In This Piece
- What Is a Good Credit Score?
- What Is a Good FICO Score?
- What Is a Good VantageScore?
- Understanding Credit Score Ranges
- What Are Credit Scores?
- How to Get a Good Credit Score
- How Lenders Use Credit Scores
- How Can I Get My Credit Scores?
- FAQs about Good Credit Scores
- What if I Don’t Have a Good Credit Score?
What Is a Good Credit Score?
A good credit score will depend on the scoring model, but either 670 or above would be considered good. Credit scores calculated using the FICO or VantageScore 3.0 scoring models range from 300 to 850.
These models use five factors to determine your credit score: payment history, amounts owed, age of credit, hard inquiries and credit mix. FICO and VantageScore weigh these factors differently though, which is why you may see a different credit score.
Since they have somewhat different range calculations, what’s considered good for VantageScore may be considered fair for FICO, and what’s considered very good for FICO may only be good by the VantageScore model. FICO and VantageScore aren’t the only credit scoring models. However, they are the most commonly used models and the ones used by the three major credit bureaus: Experian®, Equifax® and TransUnion®. Some lenders even have their own scoring models. But most lenders and credit card companies use FICO scores or VantageScores.
What Is a Good FICO Score?
For FICO, a good credit score is 670 or higher. A score over 739 would be considered very good, while a score above 800 is considered exceptional—the highest designation possible aside from a perfect 850.
What Is a Good VantageScore?
In the VantageScore 3.0 model, a good score is 661 or higher. Since this model doesn’t have a designation between good and excellent, the range of good scores is much wider than it is for FICO. Excellent scores start at 781 rather than 800 in this model, with 850 also being considered a perfect score.
Understanding Credit Score Ranges
The credit score ranges vary depending on whether you’re looking at a FICO score or a VantageScore. They line up fairly similarly, but their score designations have different labels — FICO lacks a “very poor” designation, while VantageScore lacks a “very good” range. Here’s how they break down.
FICO Score Range
- Poor: 300-579
- Fair: 580-669
- Good: 670-739
- Very Good: 740-799
- Exceptional: 800-850
VantageScore Range
- Very Poor: 300-499
- Poor: 500-600
- Fair: 601-660
- Good: 661-780
- Exceptional: 781-850
What Are Credit Scores?
The three-digit figures called credit scores are what scoring institutions use to rate your credit profile based on your credit report. Since these bureaus have their own records, your score might differ from one scoring institution to the next.
Your score suggests to potential creditors how likely you could be to repay a loan, pay off a credit card, make late payments, and default on payments. Basically, it helps them determine whether you’re an acceptable risk and if they should approve your application for a loan or credit card. A low score doesn’t always mean lenders will decline your application. Instead, it might mean they’ll consider approving you with higher interest rates or less favorable loan terms.
How to Get a Good Credit Score
VantageScore and FICO scores are calculated using similar information. Each model may use slightly different terms for these, but here’s what they’re looking for.
Payment History
FICO weight: 35%
VantageScore weight: 40%
Your payment history is your record of making on-time (or late payments). Both FICO and VantageScore take your history of payments into account when calculating your score. Every time you pay your credit card bill on-time, or your car loan payment, for example, you are adding positive payment history to your credit (and helping your score!).
Late and missed payments can also have a major impact on your credit score. Maintaining a consistent, on-time payment history goes a long way in establishing good credit.
Amounts Owed/Credit Utilization
FICO weight: 30%
VantageScore weight: 20%
Credit utilization is calculated as a ratio. It divides the amount of credit you’ve used by your total credit limit. If your credit limit is $5,000, for example, and you use $2,000 in credit, your utilization rate is 40%. It’s recommended to keep this rate to 30% or less and preferably below 10%.
Length of Credit History/Credit Age
FICO weight: 15%
VantageScore weight: 21%
Your credit history refers to the amount of time your credit accounts have been open. The longer your credit history, the better (which is another reason why most of us start out with a low credit score). For that reason, it’s a good idea to keep your oldest credit accounts open if you can. For example, if your oldest account is a credit card you opened 15 years ago and you decide to close it, your credit could take a painful hit.
Credit Mix
FICO weight: 10%
VantageScore weight: N/A
Your credit mix refers to the variety of credit accounts you have open. For example, instead of just a couple of credit cards in your name, you have a credit card and a car loan, mortgage, or student loan.
While FICO has a category explicitly for credit mix, VantageScore does not—though it might factor into other elements of your VantageScore.
New Credit/Recent Credit
FICO weight: 10%
VantageScore weight: 5%
Every time a lender pulls your credit to evaluate your creditworthiness, it’s recorded on your credit report. This is called a hard inquiry. One hard inquiry won’t have much (if any) affect on your credit. Multiple credit applications or hard inquiries in a short amount of time would have a negative effect on your credit.
For example, if you were applying for a credit card and got rejected and decided to apply to a bunch of other issuers all at once, just the process of applying could hurt your credit.
This is why when you’re applying for a new line of credit you want to be as informed as possible. If you’re rejected, maybe reach out to the issuer or lender and ask why. Or try to find other options that may pre-approve you or post credit requirements that you know you could meet.
Note: Every time you check your credit it’s recorded as a “soft inquiry” on your credit report. Soft inquiries don’t have any effect on your credit, so feel free to check your own credit as often as you want!
How Lenders Use Credit Scores
Credit scores can offer a gauge of creditworthiness for lenders to determine things like whether or not to approve you for a credit line, how much credit to approve you for, and what your interest rate should be. But while your credit score has a big role to play in this, it’s considered alongside your credit report. Lenders may also consider your income, debt and your ratio of debt to income and a lot of other factors, depending on what you’re applying for.
How Can I See My Credit Score for Free?
It’s easy to access your credit score, and there are a couple of free, secure ways to do so. Most credit cards, banks, credit unions, and lenders offer free credit score access as part of your account services. Log in to your online account to see if it’s offered.
Otherwise you could also download a credit monitoring app. There are some different credit monitoring apps that will allow you to track your score, alert you to unusual behavior or score changes and offer financial tips. (You can check your score for free right now at Credit.com!)
Good Credit Score FAQ
Do Lenders Prefer a Good VantageScore Score over a Good FICO Score?
Lenders don’t necessarily prefer one score over the other. It’s likely, though, that a given lender uses only one credit-scoring institution. FICO reports that 90% of the top U.S. lenders use FICO scores when deciding whether to loan money to an applicant. On the other hand, VantageScore states that between March 2021 and February 2023, approximately 14.5 billion VantageScore credit scores were used.
Both models are consistent enough that knowing where you stand in one gives you a reliable indication of your credit in general.
What Is a Good Credit Score to Buy a House?
Generally the higher your credit score, the lower your interest rates. That being said, most mortgage lenders will require a score of at least 580 to 640.
What Is the Highest Credit Score?
850 is the highest credit score possible for both the FICO and VantageScore models.
What Is Credit?
Credit is access to capital provided by a lender with an expectation that it will be repaid within an agreed time frame. This could be a set installment account—such as a mortgage or car loan that gets paid off gradually—or a revolving account like a credit card with a maximum balance that can be borrowed at a given time.
What if I Don’t Have a Good Credit Score?
Credit isn’t set in stone. Most things fall off your credit history within seven years (a few others may take 10 or more). Which means that eventually, you’ll be able to move on from mistakes in your past. In the meantime, try your best to make on-time payments, keep your debts low and minimize applying for new lines of credit. Building good credit isn’t an overnight process, it takes time.
The post What Is a Good Credit Score? [With Ranges] appeared first on Credit.com.
