A good credit score typically starts at 670 for FICO and 661 for VantageScore, which means you’re more likely to qualify for favorable interest rates and broader loan options.
Here’s a story: When I had just graduated from college, I wanted to get a mortgage to buy a house. But my enthusiasm soon faded when I discovered that my credit score was 600. It took me five rejections and three years of responsible borrowing to raise my credit score and qualify for a mortgage.
A lot of you might be asking: What is a good credit score? This depends on who you ask, but the answer is typically similar. Two sources of credit scores are typically taken into account – FICO and VantageScore. FICO considers a score of 670 and higher good, while VantageScore considers a range of 661 and higher as good.
So, how does your credit score affect you, and what can you do to improve it? Read on to find the answers below.
Key Takeaways
- A good credit score generally starts at 670 for FICO and 661 for VantageScore.
- With the average FICO score in the U.S. at around 717 and VantageScore at 701, many Americans fall comfortably into the “good” range.
- Good credit scores can lower interest rates and expand your borrowing options, letting you choose from a wider range of loan products.
- Check your credit report for errors, pay all bills on time, maintain a low credit utilization ratio, diversify your credit mix, and limit new credit inquiries to boost your score over time.
- Credit-building is a gradual process that rewards patience and consistency. Responsible financial habits ultimately translate into greater financial freedom, peace of mind, and the ability to achieve your long-term goals.
National Credit Score Averages
A credit score is typically a three-digit number between 300 and 850 that reflects how likely you are to repay borrowed money on time based on your past financial behavior. According to the latest data, the average credit score in the U.S. is 717 by FICO and 701 by VantageScore.
For context, many Americans find themselves in the “good” range, but it’s far from a universal standard. Some have much higher scores, and others find themselves at the lower end of the scale. This number is also purely about the American population, as other countries have their own credit score models.
Let’s look at each of these two institutions’ estimates in more detail.
What Is a Good FICO Score?
The Fair, Isaac, and Company (FICO) is the main industry standard that most lenders use to evaluate your creditworthiness. The FICO score is generated based on all your available credit accounts, payment history, and historical data. A “good” credit score typically starts at 670 and goes upward, but here’s a breakdown of their ranges:
- Excellent Credit (800–850): Borrowers in this range enjoy the best loan terms, lowest interest rates, and can often negotiate better terms as lenders view them as highly reliable.
- Very Good Credit (740–799): Although just shy of perfect, you’re still in great shape. You’ll likely qualify for attractive loan products.
- Good Credit (670–739): This is the general good credit score zone. While you won’t usually score the absolute best interest rates, you’ll have access to a broad range of loan products and credit cards at competitive rates.
- Fair Credit (580–669): Borrowers in this tier may find it harder to secure favorable loan terms, often facing higher interest rates and stricter eligibility requirements.
- Poor Credit (300–579): This is the bad credit category that signals significant risk to lenders, making it challenging to qualify for most loans or credit cards.
What Is a Good VantageScore?
The VantageScore model was created by three major credit bureaus – Equifax, Experian, and TransUnion – as an alternative to FICO. VantageScore pulls information from the same sources but weighs them slightly differently. The scores of both models tend to be very similar or within the same range. A “good” credit score generally starts around 661. Here’s how VantageScore tiers typically break down:
- Superprime (781–850): This is equivalent to having an excellent FICO score. These borrowers usually qualify for the best loan terms, lowest interest rates, and the widest variety of credit products.
- Prime (661–780): Considered a “good” to “very good” score range, you have access to most loan products and competitive interest rates.
- Near Prime (601–660): You’re closer to the mainstream lending market, but you may face somewhat higher interest rates than prime applicants.
- Subprime (300–600): Applicants here are considered high-risk, making it difficult to secure loans at favorable rates.
What Determines Your Credit Score?
The main factors that impact your credit score are:
- Duration of Credit History
- Payment Records History
- Credit Utilization Rate
- Recent Credit Inquiries
- Credit Mix
A good credit score directly affects the cost and accessibility of your financial life. When lenders view you as a trustworthy borrower, they’re more inclined to offer you loans at lower interest rates. This can save you a lot of money in the long run, whether you’re taking out a personal loan, applying for a mortgage, or financing a car.
Beyond interest rates, strong credit can put you in a position of choice. With more loan options on the table, you can shop around, compare offers, and confidently pick the one that best aligns with your needs. Over time, maintaining a good credit score can help you build a solid financial foundation, making it easier to reach your goals, combat emergencies, and ultimately enjoy greater peace of mind.
How to Improve Your Credit Score
Improving your credit score doesn’t happen overnight, but adopting consistent and responsible habits can boost it over time. With the right approach, many consumers have been able to steadily enhance their credit health. Here are some strategies you can use to repair your own credit score.
Check Your Credit Reports for Errors
Sometimes, credit report agencies may make a mistake, which can result in a reduced credit score. Regularly review your credit report from all three major credit bureaus – Equifax, Experian, and TransUnion. You’re entitled to a free report from each bureau every 12 months at AnnualCreditReport.com. Look for inaccuracies, such as accounts you don’t recognize or incorrect late payments. If you spot errors, contact the credit bureau, as disputing them is often a quick way to raise your credit score fast.
Pay Your Bills on Time
Your payment history is the single most significant factor in both FICO and VantageScore models. Even a single missed payment can hurt your credit score and stay on your report for up to seven years. Set up automatic payments or calendar reminders to ensure you never miss a due date. Over time, a spotless payment history can make a substantial positive impact on your score.
Keep Your Credit Utilization Low
Credit utilization is the ratio of your credit card balances to their limits. It plays a major role in your score. The Consumer Financial Protection Bureau (CFPB) suggests keeping this number under 30%. For instance, if you have a combined credit limit of $10,000, try not to carry more than $3,000 in total balances. Consistently keeping utilization low shows lenders you manage credit responsibly.
Diversify Your Credit Mix
Those looking to increase their credit score should focus on their credit mix. While you shouldn’t take on debt just to diversify, having a mix of credit types—like a credit card, an auto loan, and a mortgage—can benefit your score. Lenders and scoring models often look favorably on borrowers who’ve proven they can handle various forms of credit well. Consider gradually expanding your credit portfolio as your financial situation evolves.
Limit Credit Inquiries
Applying for too many new accounts in a short period can raise a red flag to lenders. Every hard inquiry, initiated when you apply for credit, can slightly lower your credit score. Be strategic about new credit and only seek it when you genuinely need it. Over time, fewer inquiries can contribute to a healthier overall credit profile.
Be Patient and Persistent
Credit building is a marathon, not a sprint. Even after adopting good habits, it will take time—sometimes several months—to see meaningful improvements. Substantial gains might require a year or more. Stay consistent, pay on time, keep balances low, and trust that your responsible behavior will yield results in the long run.
Whether you’re starting at the lower end of the scale like I did or you’re already in the good or excellent range, there’s always room for improvement. A good credit score is a powerful tool that can help you reach your biggest goals with confidence and peace of mind.
FAQ
What Is a Good Credit Score by Age?
The standards for what is a good credit score typically remain consistent across all age groups. For example, a FICO score of 670 or above is seen as good for borrowers of any age. However, the average credit score for each generation is as follows: 680 for Generation Z (Good), 690 for Millennials (Good), 709 for Generation X (Good), 745 for Baby Boomers (Good), and 760 for the Silent Generation (Very Good).
How Rare Is a 700 Credit Score?
A credit score of 700 is actually quite common and sits within the “good” range. A significant portion of U.S. consumers have scores at or above this level. In fact, the average FICO in the United States typically hovers around the low 700s.
What Is a Good Credit Score to Get a Loan?
While loan requirements vary by lender and type of loan, a score of 670 or higher is generally considered good and may make it easier to qualify for many loan types at favorable interest rates. Scores above 700 offer even more flexibility, granting you access to a wider range of lenders, products, and lower interest rates. But even with a bad credit score you can find a loan to apply.