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What is a good credit score?

A good credit score usually ranges from 680 to 750 on a scale of 300-850 by FICO and VantageScore. Typically, consumers who fall on the spectrum of good rating scores qualify for attractive interest rates, loans, and credit cards. However, the factors that make a good credit score are much more subtle. 

What is a good FICO Score?

FICO owes its name to the company that develops the Fair, Isaac, and Company credit scoring software. Most financial institutions 

WORLD use FICO scores to measure credit risk. One of the top credit bureaus in the United States, Experian, claims that two-thirds of Americans have at least a good FICO score.

FICO Score Users

Organizations and entities that lend money use FICO scores. For example, when you apply for a mortgage, car loan, or credit card, the financial institution you are applying for credit from must consult with at least one of the three major credit bureaus: Experian, Equifax, and TransUnion. The results of these three companies significantly influence the amount of credit and loan terms, which include interest rates.

What is a Good VantageScore?

According to Experian, good credit for VantageScore starts at around 700. Experian says that at least 43% of Americans have a good or better VantageScore. The three major credit agencies Equifax, TransUnion and Experian have developed this criterion. Like FICO, the models developed by VantageScore operate with data that is stored in consumer credit files. National credit bureaus maintain these files. VantageScore uses statistical analysis to predict the likelihood that a consumer will default on a loan.

Beyond FICO and VantageScore

As the FICO score is the most popular credit score, most people mention ‘credit score’ when referring to it. However, some lenders combine FICO and VantageScore with their own credit scores. Others also include some pertinent information about borrowers. Therefore, financial institutions consider several factors in addition to these two main credit scores to determine their credit and interest rates.

Why is credit score important?

Credit scores are the main decision-making tools that lenders check to predict how likely you are to repay your loan in a timely manner. Credit scores are sometimes called risk scores because they help creditors assess the risk that you are likely to not repay your debt as agreed. Having a good credit score also qualifies you to rent the apartment of your choice and get the cell phone service you need.

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Factors that affect your credit score

The factors that influence your credit score will vary based on the scoring model your financial institution uses. That said, the type, age and number of credit accounts you have and your total debt all affect your credit score. Your credit card and loan payment history, including the severity and number of late payments, also affect your credit score.

Information that credit scores do not consider

Knowing the types of information credit scores don’t consider makes you worry less about your scores. For example, they do not consider your religion, color, race, sex, marital status and nationality as determined by law. Also, scoring systems don’t use your salary, title, occupation or employment history to calculate your credit score. Scoring also does not include consumer disclosure survey, promotional survey and employment surveys.

Improving your credit score

Is your credit score bad? Your credit report is the source of information for your credit score. Therefore, your credit activity gives you real-time data on how responsible you are with credit. National credit bureaus provide information that helps you see your credit in new perspectives, which helps you take control of your financial future. For example, credit bureaus help you learn more about how some options improve or reduce your credit score, how secured credit cards help improve your credit history, and how credit repair service works. They also provide information on how you can protect your good credit after a divorce, marriage or the death of your spouse.

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Minimum credit score

Financial institutions do not require a minimum credit score threshold to apply for most credit cards and loans. Therefore, you need to wait for your credit score to improve to qualify for a conventional credit card or a loan with favorable interest rates. Some mortgage agents provide guidelines for those with low credit scores. For example, FHA mortgage loans require a score of at least 580 with a down payment of 3.5%. If your score is less than 580, but you meet other requirements, you’ll need to make a 10% down payment.


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