What number is considered a good credit score rating? On a scale that goes from 300 to 850, two of the three credit bureaus and myFICO® consider 670 as the lower end of the GOOD credit rating. On a more conservative side, you can probably consider anything above 720 as the definitive starting point for good credit score.
In addition to the credit score ratings in the chart above, TransUnion and Experian provide the percentage of the population that falls into each category. For example, TransUnion indicates that 27% of the population has an A credit rating; and Experian indicates that 21% has an Excellent credit rating. From the chart above, we can approximate that about 67% of the population has a GOOD or better credit score.
Sources: Equifax, Experian, TransUnion, and myFICO®
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Unfortunately, it is not as simple as just checking your score with any credit agency. There are many different scoring systems, and each has a different scale. New systems are introduced occasionally, and individual lenders have their own criteria and variations on scores. Even with all this variation, you can still get a good idea of where you stand by getting your credit scores from the three main credit reporting bureaus.
Note: You can get your credit reports for free from AnnualCreditReport.com.
Credit Score Chart: Good, Bad, and Excellent Ratings
While there are many credit scoring systems, it is generally accepted that any score above 720 (particularly on the FICO scale) is considered a GOOD credit score. To help you visualize this, here is a credit score chart (recognize that there are no official brackets; this is just an approximation of a continuous range):
| Experian, Equifax, and myFICO® | TransUnion | Description |
|---|---|---|
| 800 – 850 | 781 – 850 | Excellent credit score (A). You should qualify for the best interest rate and loan terms. |
| 740 – 799 | 720 – 780 | Very Good credit score (B). There won’t be any problem in getting a loan at the best interest rate and terms. |
| 670 – 739 | 658 – 719 | Good credit score (C). You should qualify for most loans with good interest rates and terms. |
| 580 – 669 | 601 – 657 | Fair credit score (D). You will have a tough time getting a loan or a credit card. |
| 300 – 579 | 300 – 600 | Poor credit score (F). It’s doubtful that you will qualify for a loan or a credit card. |
Credit Karma (FREE Credit Score)
The chart from Credit Karma suggests that a GOOD credit score is generally between 700 and higher.
While different lenders have their own standards for rating credit scores, 700 and higher (on a scale of 300 to 850) is generally considered good.
Credit Sesame (FREE Credit Score)
The image above is a scale from Credit Sesame. According to Credit Sesame
- 720-850 is EXCELLENT
- 680-720 is GOOD
- 640-680 is FAIR
- 300-640 is POOR
TransUnion ($9.95)
TransUnion has its own scoring system called VantageScore®. According to TranUnion, their scale is as follow:
- 781-850 is Credit Score Grade A
- 720-780 is Credit Score Grade B
- 658-719 is Credit Score Grade C
- 601-657 is Credit Score Grade D
- 300-600 is Credit Score Grade F
Check Your Credit Scores for Free
If you don’t know your credit scores yet, you can use some of the sites listed below to gain access to your credit scores.
| Score | Notes |
|---|---|
| Equifax | FREE from Credit Karma |
| Experian | There is currently no free option for Equifax. You can get your score directly from Equifax for $19.95. |
| TransUnion | FREE from Credit Karma and Credit Sesame |
| FICO® |
|
Additionally, some banks and credit cards will give you access to your credit score for free just because you’re their customer. Click the following link for more information on how to get your credit scores for free.
How Your Credit Worthiness Affects Your Borrowing Costs
Why does it matter to have a good score? A high credit rating can significantly reduce your borrowing costs (including 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.
Overall, your scores do a very good job of predicting how likely you are to repay your debt. Therefore, lenders rely heavily on credit scores to determine whether or not to loan you money. Your credit score also determines what price you’ll pay, in the form of interest charges and other fees. Typically, borrowers with bad credit pay higher interest rates compared to borrowers with excellent credit scores.
To give you an idea of how your credit score affects your interest rate, here’s an example of a 30-year mortgage interest rate for a $300,000 loan from the myFICO Loan Savings Calculator (data as of June 28, 2019):
| FICO® score | APR | Monthly payment |
|---|---|---|
| 760-850 | 3.486% | $1,345 |
| 700-759 | 3.708% | $1,382 |
| 680-699 | 3.885% | $1,412 |
| 660-679 | 4.099% | $1,449 |
| 640-659 | 4.529% | $1,525 |
| 620-639 | 5.075% | $1,624 |
Factors that Impact Your Credit Score
Your 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:
- 35% = Payment History – Did you miss a payment? How much was it, and how long ago did it happen? Your credit score will be better if you never miss a payment.
- 30% = Credit Utilization – This is how much you currently owe versus your credit limit. Your credit score could be negatively affected if you owe too much money.
- 15% = Length of Credit History – How long have you been using credit? The longer the better; that’s why many credit experts recommend that you do not close your credit card accounts.
- 10% = New Credit – When was the last time you applied for a loan? Was it approved, or was your application rejected? A string of loan and/or credit card applications could raise a flag and lower your score.
- 10% = Credit Mix – A good variety of loans generally helps your scores, e.g., home loan, car loan, student loan, business loan, and credit cards.
Good Credit Score Alone is Not Enough
Since you and your lender may not be looking at the same score, you might be pleasantly or unpleasantly surprised by the interest rate offered on your next loan. What happens if your lender asks you to pay a higher interest rate despite your good credit? Or worse, what if the bank doesn’t lend you the money?
This could mean a few things:
- The lender may be looking at a report that’s using a different system than the scoring scale you are looking at.
- Something could have changed since the last time you checked your credit scores.
- Your income is too low, or too unpredictable — e.g., you’re self-employed or a small business owner.
- Your debt-to-income ratio is too high — perhaps you have too many outstanding debt obligations.
- Your lender may have a very strict lending guideline.
When this happens, you might consider working with another lender or delay your loan application to give yourself time to improve your credit score.
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Pinyo Bhulipongsanon is the owner of Moolanomy Personal Finance and a Realtor® licensed in Virginia and Maryland. Over the past 20 years, Pinyo has enjoyed a diverse career as an investor, entrepreneur, business executive, educator, financial literacy author, and Realtor®.
By now most people do know that poor credit rating can limit your credit options. A common sign that you have a bad credit is when you apply for one and get turned down. This leaves marks on your credit file and having additional ones like these can make matters worse for you credit wise. If this reflects your present credit rating then your option is to avail of loans through sub-prime markets where you would be charged with higher interest rates since the lender will perceive you as a credit risk. There are ways to improve your credit rating.… Read more »
What is the website to purchase a home on good credit bad credit? I was able check it on 9/19/2013 and now it not there. I am in the process of trying to get ready to send the people the information on my data given back on that date.
Hi Pinyo! You make a good point about credit scores being relative – how “good” your credit score depends on the scoring model, the scale of the scoring model and what other criteria your lender or creditor is using to decide if you’re credit-worthy. For instance, in the home loan world, 720 is generally considered the gold standard; if you have a credit score of 720 or above, you’ll usually qualify for the best interest rates and terms. That said, there are a lot of other things that lenders take into consideration — for instance, assets or your debt-to-income ratio.… Read more »
Actually, I find it very ironic, that in order to build a “credit”, one has to go in “debt” first and pay it. But that is way system is set up.
I followed the rules and my credit score is now at 815. However i still got rejected for a loan. Im confused in how it works. does it take time for the banks to get a clear score or will it be the same as what i have been told?
It would be nice if all bureaus, organisations and credit agencies used one pre-agreed ratings scale. That way everyone would know where they are. The way credit ratings are set up at the moment is just confusing for everyone imo…
Having a good credit score to get a loan is BS. I had an excellent credit score but still couldn’t get a loan even though I’ve never been late with any payments or with my rent. I was paying $1000 in rent and the monthly payments for the loan would have been $700. Since I would no longer have been renting but paying off the loan instead-which is $300 less than the rent I was paying…how the hell are they going to tell me that I don’t make enough money? I’m self employed and write things off as told to… Read more »
Hi Pinyo,
Thanks for the informative post. I was aware of the free score at CreditKarma, but I never heard of Quizzle until now. I’ll go ahead and give it a try.
About how soon does your credit score rise once you attempt to make progress in paying your debt.
Does getting your credit score form Quizzle or other free sites effect your credit score? I know that if a creditor pulls your credit in regards to a loan application, your score goes down.
While the article is excellent, I must admit, the word good is relative. Each institution have their own grading system to rank who get a loan and while a score is important, your credit history and activity plays a very important role. You can be bankrupt and still get a 700 credit score its a matter of how you use your credit history that matters.
So my current score is 680, 685 and 699. I have 10k student loan, 17k car loan, and 4.5k personal loan. I paid the car and personal loan off. It boosted my credit score to 685, 892 and 705.
Obviously, paying off 66% of my debt didn’t make any differences whatsoever. Soon, I’ll pay off my 10K student loan in a couple of months and won’t ever need any loan ever again. Stay out of loan, banks need us, we don’t need them.
Some times whether the loan get approve or not can actually depends on the economic status, the loan officer that you deal with, the documents that you submit and many other factors.
If you can’t get approve for a loan, try to seek for a loan consultant to see whats going wrong with your credit rating.
One thing that’s vital to your credit score than people often forget is that fact that canceling your old credit cards can actually hurt your score! Once canceled, you lose all the years of good reporting that garnered your good score, but if you had a bad score, it ain’t going anywhere! Crazy, right?
Hi All, This is a very helpful post. Thanks for posting it. I explain my situation as I see nobody here has asked before. I am a spanish guy, 30 y.o., who has just been trasnfered form a spanish bank to work in the States. I have received today my first credit card ever. I would like to know how long is going to take in order to build a good credit. While I am building my credit my credit is bad or I do not have any credit? Actually I think I do not need any credit. No loan… Read more »
It really doesn’t much matter, in my experience. Last Friday I got my FICOs from TransUnion and Equifax. (I was wanting to get a major credit card as I currently only have a store card). My TU score was 757 and my EQ was 763. I thought great it should be no problem. WRONG! I applied for an AMEX Blue, and a Citi Rewards Visa. Citi declined me first, stating that the reason was because I had no revolving accounts with a balance. Okkkkkkkkk that’s what I get for not carrying a balance. Amex declined me for other reasons but… Read more »
it’s essentially your financial ID card. Heck, even Google is taking notice and serving up specific ads based on web users credit scores. To find out where you stand, check your credit report and score periodically.
One thing that you should do is never charge more than 30% of your available credit limit. This will hurt your credit score even if you pay off your credit cards every month. Never go over that percentage.
That’s why I always advise people to increase their credit limits to the max…it’s actually better for your credit score.
Just don’t go using it!
I would advise people to avoid having too many credit cards, and if you have to take out a new one you should always wait a few months before taking out any loans, as it takes this much time for your score to bounce back to the usual number and reach a good credit score.
The credit scores are not FICO scores, these are made-up scores by the “credit reporting agencies” and are different for each one. My advice is to shred all credit cards, go to a local bank for your home loan and pay your house off as soon as possible,and pay cash for used cars, new ones depreciate the minute you sign the papers. The sooner the “credit reporting agencies” go out of business the better. The credit industry is a racket and like all rackets is soon run by shady characters. Have them take your name and address off of the… Read more »
We’ve been shopping for a house and have recently learned how hard it is to get a loan being self-employed. We had to get a co-signer which meant paying mortgage insurance, but we still got a good interest rate. One thing I’ve learned for those self employed is to set your business up to where you are considered an employee, you can use an S-corp. Pay yourself a reasonable salary instead of varying amounts each month and at the end of the year your wages are reported on a w-2. By doing so you show a steady income and though… Read more »
I have 2 questions:
1. I gave my social when signing the Lease for my Rented Apt. Will it affect my Credit Score if I move into new Apartment, breaking the lease but not paying the breaking charges.
2. If I subscribe for a creadit card, enjoy their introductory cashback offer (say $500 cash back after 3 month use) and then cancel the card after 4 months, how much will I have to compromise.
Thanks in advance
We had great credit scores when we graduated from college because both my husband and I put EVERYTHING on our Discover cards and paid them in full each month. Result? We got cash back–a TINY amount, granted, when the average bill was around $30 during the school year except when we had to buy books each semester, but it was something.
You don’t have to carry debt to get good credit scores!
I declared bankruptcy and it was officially closed 7 years ago. They declined me for credit because I had medical bills I couldn’t pay. I have paid smaller accounts before due dates and more than their monthly amount and paid off store accounts. My mortgage was never late. My bankruptcy was still used against me.
I have a lot of debt that equals to $15000.00. How can I go about paying everything off without hurting me financially? I still have to live too. Is there some way I could do debt consolidation or would that hurt my credit?