What is a Good Credit Score?

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good credit score ratingA person’s credit score on the FICO® scale ranges between 300 to 850. A score of about 690 or higher indicates a very good credit history. Those with scores below 630 will often find financing at a favorable rate significantly more difficult. According to FICO®, the median credit score is 723 in the U.S. (2014). Borrowers with this average are only delinquent 5% of the time. Anything in the mid 700’s and higher is considered excellent, and results in easy credit approvals and the lowest interest rates.

Here is the general breakdown of the FICO® Score ranges:

  • Excellent Credit: 781 – 850
  • Good Credit: 661-780
  • Fair Credit: 601-660
  • Poor Credit: 501-600
  • Bad Credit: below 500

These ranges are not set in stone, because lenders have their own definitions of what is a good credit score. Lenders looking to approve more borrowers might consider a wider score range than lenders who are more selective.

There are other credit scoring methods available to lenders:

  • FICO® Score range: 300-850
  • VantageScore 3.0 range: 300–850
  • VantageScore range (versions 1.0 and 2.0): 501–990
  • PLUS Score range: 330-830
  • TransRisk Score range: 100-900
  • Equifax Credit Score range: 280–850

With every method, the higher the score, the lower the predicted risk. These scores take into account factors like payment history, debt levels, and age of credit accounts to predict how customers will handle credit and loan payments. It is important to know what method your score is based off, because a FICO® score of 840 may be an excellent score 10 points shy of the highest score possible, but a VantageScore 2.0 score of 840 is 150 points away from the highest score possible.

The Benefits of a Good Credit Score

A good credit score allows you to borrow money or open a credit card with a comparatively lower interest rate. So, strengthening your credit score helps to save money over time. Consumers should check their credit score before applying for credit, so they can identify areas for improvement, and build their score to increase their chances of approval. Improving your score before applying for new credit accounts can save you hundreds, or even thousands, of dollars in interest on a mortgage or a loan. Furthermore, lenders and employers use good credit as an indicator that someone is responsible, trustworthy, less likely to commit insurance fraud, etc. Therefore, aside from saving money through lower interest rates, building your credit score will also help you land that amazing job and purchase your dream home.


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