Generally speaking, scores between 690 and 719 are considered good credit. Scores above 720 are considered excellent, while scores between 630 and 689 are considered fair. Scores below 630 fall into the bad credit range.
FICO, the most widely known credit scoring system, and its competitor VantageScore both use a 300-850 range.
What is a good FICO score?
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.
FICO scores typically express a consumer's creditworthiness as a number between 300 and 850.
A good FICO score lies between 670 and 739, according to the company's website. FICO says scores between 580 and 669 are considered "fair" and those between 740 and 799 are considered "very good." Anything above 800 is considered "exceptional."
According to FICO, the average credit score in 2020 was 711, which falls in the good range.
What is a good VantageScore?
FICO's competitor, VantageScore produces a similar score using the same credit report data from the three bureaus. (NerdWallet offers you a free credit score using VantageScore and your TransUnion credit report.)
A good VantageScore lies between 661 and 780, which the company calls a "prime" credit tier. VantageScores above 780 are considered "superprime" while those between 601 and 660 are "near prime." VantageScores below 600 are considered "subprime."
The average VantageScore in 2020 was 688, according to VantageScore's October 2020 "State of Credit" report.
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.
Among the 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.
A mortgage with a favorable interest rate.
The ability to open new credit to cover expenses in a crisis if you don't have an emergency fund or it runs out.
A good credit score helps in other ways: In many states, people with higher credit scores pay less for car insurance. In addition, some landlords use credit scores to screen tenants.
So having a good credit score is helpful whether you plan to apply for credit or not.
What is a good credit score according to lenders?
Lenders, such as credit card issuers and mortgage providers, may set their own standards on what "good credit" means as they decide whether to grant you credit and at what interest rate.
In practice, though, a good credit score is the one that helps you get what you need or want, whether that's access to new credit in a pinch or lower mortgage rates.
What affects your credit score?
On the list of what affects your credit score, two factors have the biggest influence: Payment history, which is whether you pay on time, and credit utilization, which is how much of your credit limits you have in use.
Other factors matter but carry a little less weight: how long you've had credit, whether you have a mix of credit types 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. This is important because 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 7 years.
Try to keep your credit card balances well below your credit limits; aim for credit utilization under 30%, and 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 unless there is a compelling reason, such as high fees or poor service, to close them. Keeping older accounts open helps your average age of accounts, which has a small influence on your score. Also, closing an account cuts into your overall credit limit, driving up your credit utilization.
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.
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).
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Commonly asked questions about credit scores
Is 700 a good credit score?
A 700 credit score is considered good. With good credit, you're more likely to get approved for credit (although lenders may consider other factors besides score). And you're likelier to get favorable terms like a lower interest rate.
What is an excellent credit score?
Excellent credit scores fall between 720 and the highest score, 850. You don't have to get a perfect 850 — scores above 800 get you the best credit terms.
What is a fair credit score?
A fair credit score is in the 630-689 range. It could be more difficult to qualify for credit or get the terms you want.
What is a bad credit score?
Scores under 630 fall in the bad credit range. Try the above tips to help build up your credit profile.