What is a good credit score?

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A credit score is a three-digit number between 300 and 850, based on your credit history. Lenders use it to assess your ability to repay a loan. A good credit score is often considered to be 670 or higher, but it depends on the credit score model used.

Read: What is a good credit score for your financial goal?
Full or Partial Payments: Which Is Better For Your Credit Score?

Find out what is considered a good credit score and what it takes to achieve it.

Different types of credit scores

It is important to know that there are several different credit scores. The two main scores are the FICO Score and the VantageScore. Many companies use one of these to determine creditworthiness.

However, some industries have their own ways of calculating credit scores based on factors they deem important. For example, a mortgage company typically weighs credit factors differently than a car loan company.

If you are denied credit, ask the loan company for details. By getting the details of the factors that weigh the most, you can create a focused credit improvement strategy.

Good to know

The factors that impact your credit are generally the same across all industries; they are just calculated differently. Instead of focusing on different industries, focus on improving factors as a whole. This will increase your chances of getting approved with any lender.

Check Out: 10 Things To Do Now If You Have a Credit Score of 500

What is a good credit score?

To determine what is considered a good credit score, look at each type of credit score method. They each have their own algorithms.

Good FICO score

FICO stands for Fair Isaac Corporation. It is one of the most common credit scoring models today. Here is the FICO score scale to help you understand what is considered a good FICO score.




800 or more


Easy approval, lowest rates


Very good

Good luck with acceptance, lower rates



Borrowers considered acceptable



Subprime borrowers with higher rates and less chance of approval

579 or less


Borrowers considered risky; lenders may require deposits to access credit

Good VantageScore

VantageScore heavily bases individual credit scores on payment history and overdue balances. Here is an overview of the VantageScore scale.






Easy approval, lowest rates



Good luck with acceptance, lower rates


Near the first

Borrowers considered acceptable



Higher rates and less chance of approval

What factors affect your credit score?

Both FICO and VantageScore are calculated according to their own algorithms. Below is a breakdown of each.

what is a good credit score

what is a good credit score

FICO factors

According to Fair Isaac Corp., the company that created the FICO credit scoring algorithm, here are the factors that can lead to a bad credit score:

VantageScore factors

Here’s the breakdown of how the VantageScore is calculated so you can compare the two:

  • Payment history: 40%

  • Credit depth: 21%

  • Use: 20%

  • Sale: 11%

  • Recent credit: 5%

  • Available credit: 3%

Find out: How it is possible to have a perfect payment history and bad credit

Understand the key factors

Let’s take a closer look at how these factors work.

payment history

With FICO and VantageScore, your payment history is the most crucial factor. It gives lenders insight into your ability to make payments on time. It also includes details on missed payments, late payments, overdue days, and collection accounts.

Use of credit

Credit usage is the amount of debt you have over how much you use. When your credit usage exceeds 30%, you may be flagged as a high-risk borrower.

Credit inquiries

A flurry of new credit applications – or difficult inquiries – is a sign of financial stress and can hurt your credit score.

Length of credit history

The length of your credit history also affects your score. A long history of making payments on time and managing your accounts responsibly is a positive sign for lenders.

Credit mix

The credit mix shows the number of revolving accounts like credit cards versus the number of installment loans like mortgages or auto loans. A good mix between the two is ideal.

Factors not taken into account in your credit score

Your credit score is based on how you use the credit that is given to you. It does not include the following factors:

  • Gender, race, relationship status, education, religion, sexuality, political affiliation, national origin or age

  • Residence

  • Income or job title (although income is factored into a credit application, it does not affect your credit score)

  • Being refused a loan

  • Checking your credit report

Why is a good credit score important?

The truth is that your credit score can impact your whole life. For example, a low credit score can:

  • Prevent you from getting certain jobs and housing, as this can be seen as a sign of irresponsibility.

  • Lead to high interest rates on mortgages, auto loans, and other types of loans. This can mean that you are paying double or more for a product than those with higher credit scores.

  • Prevent you from being approved in furniture or appliance stores. When you desperately need a new refrigerator, you might find yourself paying hefty prices at a rental store with an option to buy.

While these are just a few examples, they are great illustrations of how a bad credit score can cost you over time. A good credit score opens the door to opportunities for lower payments, lower interest, better jobs and better housing, and more.

See also: The Best Ways to Pay Off All Types of Debt

Steps to Check, Monitor, and Improve Your Credit

Take the following steps to take control of your credit.

Step 1: Get Your Credit Report

Start by getting a copy of your credit report from one of the following places.

Credit bureaus

According to the Fair Credit Reporting Act, each of the three major credit bureaus – Equifax, Experian, and TransUnion – is required to provide you with a free copy of your credit report upon request once a year.

You can request your free credit report at AnnualCreditReport.com. Starting in 2020, you can get at least six more free credit reports each year through 2026. To get started, visit Equifax or call 866-349-5191.

During the COVID-19 pandemic, the three major credit bureaus offer free weekly credit reports, which you can request and view online.

Credit card companies

Many credit card issuers provide access to credit scores as well as updates to cardholders. Check with your card issuer to see if it offers this benefit.

Credit counselors

A nonprofit credit counselor can often provide you with a free copy of your credit report to discuss with you. You can find such organizations through the National Foundation for Credit Counseling.

Step 2: Check your credit report for errors

Check each report for errors, such as fraudulent activity, accounts that don’t belong to you, or payments marked as overdue that you made on time. Dispute any errors directly with each credit bureau.

Step 3: Prioritize payments on time

In the future, do your best to avoid late payments. Try to reduce overdue balances as much as possible. This is the clearest indication to lenders that you are not a risk, and it will have the most significant impact on your score.

Step 4: Do not apply for new credit unless it is absolutely necessary

Only apply for new credit if you absolutely need it. New credit requests will temporarily lower your score.

Step 5: Develop good financial habits

Some good financial habits include paying your bills on time, paying off your credit card in full each month, and avoiding multiple credit requests in a short period of time.

Step 6: Keep an eye on your credit

Sign up for a credit monitoring program that can alert you when changes are made. Even if you do this, however, it is important that you control your credit manually.

At least once a month, submit your report through a company like Credit Karma or Experian. It’s free and gives you an overview of any changes.

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Brandy Woodfolk contributed to the writing of this article.

Last updated: July 9, 2021

This article originally appeared on GOBankingRates.com: What is a good credit score?

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