What is a good credit score?

Summary

• Your FICO credit score ranges between 300 to 850.
• If you have a higher credit score, you may be more likely to qualify for a loan or line of credit with lower interest rates and better terms. 
• Your overall credit score is based on several factors, including payment history, credit utilization, length of credit history, amount of new credit, and credit mix.
• If you want to rent an apartment, finance a car, or qualify for a mortgage, having a good credit score could make the approval process much easier (and more likely). With credit scores ranging from 300 to 850, a score between 670-739 is considered good, per Fair Isaac Corporation (FICO), a popular credit scoring system used by 90% of lenders.
• In this article, we’ll explore what it means to have a good credit score and what steps you can take to improve your score.

What are credit score ranges?

The range of credit scores runs from 300 to 850, and simply put, the higher your score, the better. FICO provides the following credit score ranges and ratings:

Credit Score                Range Rating
<580                              Poor
580-669                        Fair
670-739                        Good
740-799                        Very good
800+                              Exceptional

Scores under 600 may make it difficult to secure a line of credit, while scores between 600 and 700 may be more favorable. Scores of 700 and above are considered “good,” and scores over 800 are considered “exceptional.” Those who have “very good” or “exceptional” credit scores are more likely to qualify for loans and receive favorable terms, like lower interest rates and flexible repayment periods.

If you have a high credit score, you may not have difficulty securing a line of credit or loan. If you’re on the lower end of the credit score range, applying for credit might be more complicated, so it's good to know what to expect before you begin. Don’t be discouraged though: it’s never too late (or too soon) to take steps to repair your credit score.

What factors affect your credit score?

Your credit score is based primarily on the following factors:

• Payment history: Paying bills on time consistently can greatly improve your overall score. If you are 30, 60, or 90+ days late with a payment, it may be documented with credit bureaus and can lower your credit score¹ A history of late payments on several accounts can cause more damage than late payments on a single account.
• Credit utilization: Credit utilization refers to the amount you owe relative to the credit available to you. If your debt is more than 30% of your total credit limit, your credit score may begin to fall.
• Length of credit history: The longer you’ve had one or more lines of credit, the more responsible you may seem to a lender. As the amount of time you’ve had a line of credit adds up, your credit score can increase. However, be wary of opening multiple new accounts in the hopes of building credit quickly. This reduces your “average account age” and can reduce your score.
• Amount of new credit: Every time you apply for new credit, that “hard” inquiry becomes part of your credit report. Applying for too many lines of credit in a short amount of time can lower your score. However, applying for many of the same types of loans within a few weeks, like when you’re shopping around for a mortgage, may be consolidated into a single hard credit inquiry.
• Credit mix: Installment loans, like mortgages and car loans, represent different types of credit than revolving debt, like traditional credit cards. Having a well-balanced mix of different lines of credit can benefit your credit score since it shows lenders you’re able to manage different types of debt effectively.

Being proactive about your credit health can put you at an advantage when making major purchases. If you’re actively trying to improve your credit score, explore credit card options that allow you to check your score as often as you like. For example, the U.S. Bank Altitude® Go Visa Signature® card gives you unlimited access to information about your credit score.

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