What Is a Good Credit Score?

A good FICO credit score is 670–739; “very good” is 740–799, and “exceptional” is 800–850. The U.S. average is 713. A score above 670 typically qualifies you for better loan terms, lower interest rates on mortgages and car loans, and preferred status with landlords and employers. Build a good score by making on-time payments, keeping credit utilization below 30%, and avoiding unnecessary new credit applications.

What is a Good Credit Score?

A good credit score can make a big difference when you want to make a big purchase. It could help you qualify for top-tier credit card offers and obtain large loans, such as mortgages with lower interest rates. Learn more about what is a good credit score and how you can achieve this financial milestone.

What is a good credit score?

A good FICO score tends to fall between 670 to 739. FICO scores higher than 740 fall into the very good and exceptional categories.

For example, you might ask yourself, ‘Is 700 a good credit score?’ The answer is yes; a 700-credit score falls firmly into the good category. If you have a FICO score of 700, that’s slightly below the average credit score in the United States, which is 713, according to Experian data.

Credit score ranges

You’ll run into many different credit score models, including FICO scores and VantageScores. Below you’ll find a breakdown of credit score ranges for FICO scores, which fall on a scale between 300 and 850, according to myFICO.

Score range	Rating	Description
300-580	Poor	You will have trouble qualifying for credit with any reputable creditors. If you do qualify, you’ll likely have ultra-high interest rates.
580-669	Fair	Many lenders will approve you, but you may have high interest rates that make debt expensive.
670-739	Good	You won’t have trouble qualifying for most credit products, but you might not qualify for the best rates.
740-799	Very Good	You exceed most creditors’ requirements for their lowest interest rates on credit cards and loans.
800-850	Exceptional	You far exceed most creditors’ score requirements, and there’s an exceptionally low risk that you’ll miss debt payments.

Anything above 670 is generally considered a healthy credit score. But if your credit score is above 800, you are working with excellent credit.

What factors affect your credit score?

Your credit score is created with information on your credit report. Essentially, your credit report serves as a report card of your credit management behaviors. Here’s a look at the key factors impacting your credit score:

Payment history: Lenders will evaluate your history of making on-time payments as well as whether you have any late or missed payments on your credit report. Late or missed payments can have a serious lasting impact on your score, generally for up to seven years.
Credit utilization: It’s the ratio of the amount of credit you’re using in proportion to your overall credit limits. For a good score, you’ll need to maintain low credit utilization, typically under 30%.
Length of credit history: The age of your credit accounts is another key ingredient in the score calculation. The longer you can manage to keep accounts open, the more your score can rise.

New activity: When a potential lender pulls your credit report to decide whether to extend credit to you, that may register as a “hard inquiry” on your credit report. Your score may drop a few points as a result, particularly if multiple hard inquiries appear on your report.

Credit mix: Lenders like to see that you have managed various types of credit, including credit cards, installment loans, auto loans, and more. Although this factor is less important than the others, it still plays a role.

The benefits of having a good credit score

In general, borrowers with a credit score above 670 find better financing options than those with a fair or poor credit score. Consider your long-term financial plans. If making a big purchase is on your radar, then having a good credit score should be a priority.

For example, if you want to purchase a home and get a mortgage loan or consolidate debt with a personal loan to lock in better interest rates, a good credit score can help.

Beyond more affordable financing, future landlords might check your credit score. Many landlords prefer tenants with a good credit score, because it reflects a history of paying bills on time.

How to improve your credit scores

A good credit score can make your life easier. But the first step is to build your credit score, which takes time and energy. Here are some tips to help you obtain the credit score you desire.

Make on-time payments

The single most important ingredient in a good credit score is a record of on-time regular payments. That means you must pay your credit card and loan payments on time every month.

Lower your credit utilization

You can also improve your score by maintaining low credit utilization across all your accounts. Aim to charge less than 30% of your total credit limit at any given time. Paying down debt on your credit cards—and then keeping those accounts open—will free up some of the available credit and can gradually increase your score.

Be strategic when applying for new credit and closing old accounts

Applying for a new line of credit or loan can push a hard inquiry into your credit report. Enough hard inquiries could bring your credit score down. It’s important to be strategic as lenders might be concerned if you applied for a lot of credit in a small amount of time. So, avoid applying for new credit unless you absolutely need to. For example, skip opening multiple credit cards if you can meet your spending needs with one. Additionally, closing an old credit card can negatively impact your credit score by reducing the length of your credit history and potentially increasing your utilization rate.

A good credit score makes a difference

A good credit score can have a positive impact on your financial situation. With the right credit score, you can potentially tap into more affordable financing options as you move through life. Depending on your situation, a good credit score could lead to saving thousands on interest payments.

Now that you know what a good credit score is, chart a course to improve your own credit score.

Prosper does not provide tax, financial or legal advice and this post is not intended to be tax, financial or legal advice. We recommend that you consult with your financial or tax advisor if you have any questions.

Written by Sarah Sharkey and Edited by Rose Wheeler

Sarah Sharkey is a personal finance writer who enjoys diving into the details to help readers make savvy financial decisions. She lives in Florida with her husband and dogs. When she’s not writing, she’s outside exploring the coast. You can connect with her on her blog Adventurous Adulting.