What number is considered a good credit score rating? On a scale that usually goes from 300 to 850, the short answer is anything above 720. And why does it matter to have a good score? Simply put, a high credit rating can significantly reduce your borrowing costs (i.e., the interest rate you have to pay the lenders) — even if you don’t plan to borrow money, having a good credit score can benefit you in many ways.
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However, it is not that simple because there are many different scoring systems with different scales and with new systems introduced occasionally — not to mention individual lenders have their own criteria. However, you can get a good idea of where you stand by getting your credit scores from the three main credit reporting bureaus listed below.
Note: You can also get your credit reports for free from AnnualCreditReport.com.
If you don’t know your credit scores yet, you can check out some of these sites below to gain access to your credit scores.
* There is currently no completely free option for Equifax. You can enroll in GoFreeCredit credit monitoring trial (regularly $16.95 per month) to get your credit score; and if you choose not to continue, you can cancel your membership. Or you can get your score directly from Equifax for a one-time fee of $19.95. Click here for more information on how to get your credit scores for free.
While there are many credit scoring systems, it is generally accepted that any score above 720 is considered a GOOD credit score. To help you visualize this, here’s a rating scale (it’s important to recognize that there is no official brackets and this is just an approximation of a continuous range):
|750+||Excellent credit score. You should qualify for the best interest rate and loan terms.|
|700 – 750||Good credit score. There won’t be any problem in getting a loan at a good interest rate.|
|640 – 700||Average credit score. You may qualify for the loan but not at a good interest rate.|
|580 – 640||Poor credit score. You will have a tough time getting a loan or a credit card.|
|below 580||Bad credit score. It’s doubtful that you will qualify for a loan or a credit card.|
To help you get a better idea, the image above is a scale from Credit Sesame. According to Credit Sesame, a GOOD credit score rating ranges from 680-739 and an EXCELLENT credit score is anything above 740.
Here is a chart from Credit Karma. According to Credit Karma, a GOOD credit score is generally between 700 and 750.
Here is an older image from the now retired Equifax Credit Score Card™. According to Equifax, a GOOD credit score rating ranges from 725-759 and an EXCELLENT credit score is anything above 760.
Overall, your scores do a very good job of predicting how likely you are to repay your debt. Therefore, lenders extensively use credit scores to determine whether or not to loan you the money and at what price (i.e., interest rate). Typically, people with higher credit scores get lower interest rates compared to people with lower credit scores.
|FICO® score||APR||Monthly payment|
Graphic from myFICO’s About FICO scores page
In general, credit score is a number generated by a mathematical formula. This formula analyzes information in your credit report to derive your credit score — a number ranging from 300 to 850. Your credit score is a reflection of your credibility (creditworthiness). Here are some of the key factors that affect your credit score rating:
However, there is no standard that dictates what a good score is. As such, it’s possible that you may be surprised by the interest rate offered on your next loan. What happens if your lender asks you to pay a high interest rate despite your good credit, or worse, doesn’t lend you the money?
This could mean a few things:
When this happens, you might consider working with another lender or delay your loan application to give yourself time to improve your credit score.
|700 - 750||Good|
|640 - 700||Average|
|580 - 640||Poor|