A good credit score generally starts around 690 on a 300-850 scale used by FICO and VantageScore, the two most common scoring systems.
In practice, though, a good credit score is in the eye of the beholder. Lenders, such as credit card issuers and mortgage providers, may set different standards on what a “good” credit score is. They use it to determine whether to extend credit to you and at what interest rate.
Generally, the higher your score, the better your options.
What is a good FICO score?
FICO, the most widely known credit score, describes “good” scores as 670-739 on its 300-850 range. Experian, one of the major credit bureaus, says 66% percent of Americans have a good FICO score or better.
FICO score ranges
The average FICO score hit a record 700 in 2017, according to FICO.
What is a good VantageScore?
For VantageScore, “good” credit starts at about 700, according to Experian. By that measure, about 43% of scores can be classified as good or better. VantageScore was developed by the three major credit bureaus, Equifax, Experian and TransUnion.
The average VantageScore in 2017 was 675, according to Experian’s annual State of Credit report.
What a good score means for you
Having good credit matters because it can affect how much you pay in interest when you borrow money.
In many states, people with higher credit scores pay less for car insurance.
In many states, people with higher credit scores pay less for car insurance. In addition, some landlords use credit scores to screen tenants. Employers may also look at credit reports (though not scores) as part of the hiring process.
So having a good credit score is helpful whether you have plans to apply for credit or not.
Among the things you can likely get with a “good” score:
- A desirable car loan or lease.
- An unsecured credit card with a decent interest rate, or even a balance-transfer card.
- A mortgage.
How to get a good score
Good credit habits, practiced consistently, will result in a good credit score. Here’s what you need to do:
- Pay bills on time, every time.
- Use credit lightly. Keep credit card balances well below credit limits. Don’t go higher than 30%, and lower is better.
- Keep credit accounts open unless there is a compelling reason, such as high fees or poor service, to close them.
- Use both installment (level payments for a set time) loans and credit cards.
- 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 they 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).