What Is a Good Credit Score and How Do I Get One?
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Generally speaking, a good credit score is 690 to 719 in the commonly used 300-850 credit score range. Scores 720 and above are considered excellent, while scores 630 to 689 are considered fair. Scores below 630 fall into the bad credit range.
NerdWallet's credit score bands, used for general guidance, are pictured above.
Lenders, such as credit card issuers and mortgage providers, may set their own standards on what "good credit" means as they decide whether to extend credit to you and at what interest rate. And there are some industry-specific credit scores that vary slightly, like the FICO Auto score, which can fall between 250 and 900.
It's better to have a high credit score than a low one because higher scores grant better and wider access to the things you want and need at the best rates. Good or excellent credit will better position you to get approved to buy a home, open a new credit card or get the best terms, like low interest rates.
What's the average credit score?
The average credit score was 717 for FICO, according to its most recently available data for October 2023. That falls in the good range and is slightly lower than the 718 average score reported earlier that year.
The average VantageScore 3.0 as of October 2023 was 700.
FICO vs. VantageScore
There are two major credit scoring companies, FICO and VantageScore. FICO, the most widely known credit scoring system, and its competitor VantageScore both use the 300-850 range. However, the two systems group good credit scores slightly differently from each other.
What is a good FICO score?
A good FICO score is 670 to 739, according to the company's website.
FICO says scores of 580 to 669 are considered "fair" and 740 to 799 are considered "very good." Anything at 800 or above is considered "exceptional."
FICO comes from Fair Isaac Corp., the company that first developed a credit scoring system. It uses data about consumers from the three major credit reporting bureaus: TransUnion, Equifax and Experian.
What is a good VantageScore?
A good VantageScore is 661 to 780, which the company calls a "prime" credit tier.
VantageScores 781 to 850 are considered "superprime," while 601 to 660 are "near prime." VantageScores 600 and below are considered "subprime." These ranges are for VantageScore 3.0.
VantageScore produces a similar score to competitor FICO using the same credit report data from the three bureaus.
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What a good credit score can get you
Having good credit matters because it determines whether you can borrow money and how much you'll pay in interest to do so. A good credit score can also help you get approved for credit cards with higher credit limits, extra benefits and other incentives. In many states, people with higher credit-based insurance scores pay less for car insurance.
Here are some other things a good credit score can help you get:
An unsecured credit card with a decent interest rate, or even a balance-transfer card.
A desirable car loan or lease. If your credit score is around 700 or below, prepare for questions about negative items on your credit record when shopping for a car. People with major blemishes on their credit are routinely approved for car loans, but you may not qualify for a low rate.
A mortgage with a favorable interest rate. You don’t need flawless credit to get a mortgage. In some cases, credit scores can be in the 500s. But credit scores estimate the risk that you won’t repay as agreed, so lenders do reward higher scores with lower interest rates.
An upper hand in the rental application process. Landlords or property managers use credit scores to screen tenants, although they generally aren't looking for immaculate scores. They're more interested in your credit record. Learn more about what landlords look for in a credit check.
The ability to open new credit. This flexibility can help you cover expenses in a crisis or grant access to specialty rewards and travel cards. No matter the reason, being able to open a new line of credit when needed is a real benefit of having a good score.
What affects your credit score?
On the list of what affects your credit score, two factors have the biggest influence:
Payment history: Your record of paying your bills on time.
Credit utilization: How much of your available credit you are using.
Other factors matter but carry a little less weight: how long you've had credit (credit age), whether you have a mix of credit types (credit mix), and how frequently and recently you've applied for credit.
How to get a good credit score
Good credit habits, practiced consistently, will build your score. Here’s what you need to do:
Pay bills on time
Payment history has the largest impact of all the factors in your score. A missed or late payment can do tremendous damage to a credit score and it can stay on your credit report for up to seven years. Luckily, the impact on your score will dwindle over time.
Keep credit utilization below 30%
Keeping your credit card balances well below your credit limits is a great financial habit. You should aim for credit utilization under 30%, but lower is better. High utilization dings your score, but the damage will fade when you're able to reduce your balances and the lower utilization shows up on your credit reports. You also may be able to lower utilization by getting a higher credit limit or becoming an authorized user on a lightly used card with a large limit.
Keep credit accounts open
Keeping older accounts open helps your average age of accounts, which has a small influence on your score. Closing an account cuts into your overall credit limit, driving up your credit utilization. However, there are some compelling reasons to close an account, including high fees or poor service.
Space out credit applications
Avoid making several credit applications in a short time frame. Credit checks for the purpose of credit decisions can cause a small, temporary dip in your score, and several in a short time can add up. That's why it's important to research credit cards before you apply.
Monitor your credit reports
Monitor your credit reports and dispute information you believe is incorrect or too old to be included (most negative information falls off after seven years). Errors could lower your scores.
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What is the highest credit score?
The highest score you can have on the most widely used scales is 850. According to data from FICO, about 1.7% of all FICO scores were at the coveted 850 as of April 2023. And even if you do get there, the fluctuating nature of credit scores means you’re unlikely to keep it month after month. FICO and VantageScore's average credit scores by age reveal where most people's scores actually land.
Here's the bottom line: You don't need a perfect credit score to get the best deals. A score of 720 or higher is generally considered excellent. And scoring 800 or above qualifies you for the best terms offered.
