What Is a Good Credit Score? Ranges, Factors and How to Improve
In this guide
- What is a credit score?
- What is a good credit score?
- The five factors that determine your FICO score
- What doesn’t affect your credit score
- How to check your credit score and reports for free
- How to improve your credit score: 8 proven steps
- How long does it take to improve a credit score?
- Frequently asked questions
- What to remember
Your credit score is a three-digit number that quietly affects a lot of your financial life: whether you’re approved for an apartment, what interest rate you pay on a car loan or mortgage, which credit cards you qualify for and sometimes even the deposit you need for utilities. A good score can save you tens of thousands of dollars over your lifetime.
So what counts as a good credit score, and how do you get one? Below, we cover the score ranges, the factors that drive your score, how to check it for free and the most effective ways to improve it.
What is a credit score?
A credit score is a number, usually between 300 and 850, that estimates how likely you are to repay borrowed money on time. Lenders use it to decide whether to approve you and at what interest rate.
Your score is calculated from the information in your credit reports, which are maintained by the three nationwide credit bureaus: Equifax, Experian and TransUnion. The two main scoring companies are:
- FICO, used in the vast majority of lending decisions
- VantageScore, created jointly by the three bureaus and common in free credit-monitoring apps
You don’t have just one credit score. You have many, depending on the scoring model, its version and which bureau’s data is used. They’re usually close, but don’t be surprised if the numbers differ by 20 points or more.
What is a good credit score?
For FICO scores, a “good” score generally starts at 670. Here’s how the ranges break down:
| FICO score range | Rating | What it typically means |
|---|---|---|
| 800–850 | Exceptional | Access to the best rates and terms |
| 740–799 | Very good | Better-than-average rates; approval for most products |
| 670–739 | Good | Considered acceptable by most lenders |
| 580–669 | Fair | Approval possible, often with higher rates |
| 300–579 | Poor | Difficulty getting approved; may need secured products |
VantageScore uses the same 300–850 scale with slightly different ranges:
| VantageScore range | Rating |
|---|---|
| 781–850 | Excellent |
| 661–780 | Good |
| 601–660 | Fair |
| 500–600 | Poor |
| 300–499 | Very poor |
Why a good score is worth money
The difference between a fair and a very good score shows up in interest rates. On large loans, even one percentage point matters.
Example: On a $300,000, 30-year mortgage, a rate of 6.5% means a monthly principal and interest payment of about $1,896. At 7.5%, the payment is about $2,098 — roughly $200 more per month, or more than $72,000 over the life of the loan. Lenders often offer their lowest rates to borrowers with scores around 740 and above. (Mortgage rates are illustrative; actual rates change daily.)
The five factors that determine your FICO score
FICO publishes the general weight of each category in its scoring model:
| Factor | Approximate weight | What it measures |
|---|---|---|
| Payment history | 35% | Whether you pay on time, and any late payments, collections or bankruptcies |
| Amounts owed | 30% | How much of your available credit you’re using (credit utilization) |
| Length of credit history | 15% | Age of your oldest account, newest account and the average |
| New credit | 10% | Recent applications (hard inquiries) and newly opened accounts |
| Credit mix | 10% | Having different types of credit, like cards and installment loans |
1. Payment history (35%)
This is the single most important factor. A payment that’s 30 or more days late can be reported to the bureaus and stay on your credit report for up to seven years, although its impact fades over time. Collections and bankruptcies are even more damaging.
2. Amounts owed and credit utilization (30%)
Credit utilization is the percentage of your available revolving credit that you’re using. If you have a $5,000 limit and a $1,500 balance, your utilization is 30%.
Lower is better. Many experts suggest staying below 30%, and people with the highest scores often keep utilization under 10%. Both your overall utilization and each individual card’s utilization matter.
Good news: utilization has no memory in most scoring models. Pay down your balances, and your score can improve as soon as the lower balance is reported, typically within a month or two.
3. Length of credit history (15%)
A longer history gives lenders more data. That’s why closing your oldest credit card can sometimes lower your score. If an old card has no annual fee, it often makes sense to keep it open and use it occasionally.
4. New credit (10%)
Each application for credit can create a hard inquiry, which may lower your score by a few points for up to a year (inquiries stay on your report for two years). Opening several accounts in a short time can signal risk.
Rate shopping for a mortgage, auto loan or student loan is treated differently: multiple inquiries for the same type of loan within a short window are usually counted as one.
5. Credit mix (10%)
Having both revolving credit (credit cards) and installment loans (auto, student, mortgage) can help slightly. But never take out a loan just to improve your mix — the benefit is small and the cost is real.
What doesn’t affect your credit score
Many things people worry about have no direct effect on credit scores:
- Your income, salary or job title
- Your savings or checking account balances
- Checking your own credit (a soft inquiry)
- Your age, race, religion, gender, national origin or marital status
- Where you live
- Debit card use
How to check your credit score and reports for free
- Free credit reports: You can get free reports from all three bureaus at AnnualCreditReport.com, the only website authorized by federal law for this purpose. The bureaus now offer free reports weekly.
- Free credit scores: Many banks and credit card issuers show a free FICO Score or VantageScore in their apps. Credit-monitoring services and the bureaus also offer free scores.
Checking your own reports and scores never hurts your credit.
Dispute errors on your report
Review each report for accounts you don’t recognize, incorrect late payments or wrong balances. If you find an error, you can dispute it directly with the bureau online, and the bureau generally must investigate within 30 days. The Consumer Financial Protection Bureau (CFPB) provides sample dispute letters on its website.
How to improve your credit score: 8 proven steps
- Pay every bill on time. Set up autopay for at least the minimum payment on every account. One missed payment can do more damage than almost anything else.
- Lower your credit utilization. Pay down card balances, ideally below 30% and closer to 10%. Making a payment before your statement closing date can lower the balance that gets reported.
- Ask for a credit limit increase. A higher limit with the same balance lowers your utilization. Ask your issuer whether the request will cause a hard inquiry.
- Keep old accounts open. Especially no-fee cards. Use them for a small purchase every few months so the issuer doesn’t close them.
- Limit new applications. Apply only for credit you need, and space applications out.
- Become an authorized user. Being added to a trusted family member’s long-standing, low-balance card can help, particularly when you’re starting out.
- Dispute errors. Removing an incorrect late payment or collection can raise your score significantly.
- Deal with past-due accounts. Bring late accounts current as soon as possible. The longer a delinquency continues, the worse the damage.
If you’re starting with little or no credit history, our guide on how to build credit from scratch covers secured cards, credit-builder loans and other tools.
How long does it take to improve a credit score?
| Action | Typical time to see impact |
|---|---|
| Paying down credit card balances | 1–2 months (once new balances are reported) |
| Removing an error after a successful dispute | About 30–45 days |
| Building a score from no history | Around 6 months of reported activity for a first FICO Score |
| Recovering from a late payment | Impact fades gradually over months to years |
| Recovering from bankruptcy or collections | Several years |
Frequently asked questions
Is 700 a good credit score?
Yes. A 700 FICO score falls in the “good” range (670–739). You’ll qualify for most loans and cards, though the very best rates usually require scores above 740.
What is the average credit score in the US?
The average FICO Score in the US has been around 715 in recent years, according to FICO’s published data. Averages tend to rise with age, largely because older borrowers have longer credit histories.
Why is my credit score different on different apps?
Apps may use different scoring models (FICO or VantageScore), different versions and data from different bureaus. Focus on the trend over time rather than any single number.
Does paying off a loan raise my credit score?
Not always right away. Paying off an installment loan reduces your debt, but closing the account can slightly change your credit mix or average account age. Paying down credit card balances usually has a more direct positive effect.
How can I raise my credit score by 100 points?
It depends on what’s holding it back. If high utilization is the issue, paying balances down can lead to a large jump within a couple of months. If late payments or collections are the problem, improvement takes longer and depends on consistent on-time payments.
What to remember
A good credit score generally starts at 670, a very good score at 740 and an exceptional score at 800. Your score is driven mostly by paying on time and keeping balances low relative to your limits. Check your reports for free, dispute errors and make automatic payments your default.
Where to start: Pull your free credit reports at AnnualCreditReport.com today and review them for errors. Then set up autopay on every account. If you’re carrying card balances, see how the debt snowball and avalanche methods can help you pay them down and lift your utilization.