What is a good credit score?

A credit score is a number, usually between 300 and 850, that gives a picture of a consumer’s creditworthiness. Lenders use these scores to decide whether a potential borrower qualifies for a loan, and in many cases to determine the interest rate and other terms. By tracking and maintaining results in the good range or better, consumers can qualify for best rewards credit card and other loans.

What is a good credit score?

Two companies control the credit score market: FICO and VantageScore. FICO considers a score of 670 to 739 as good, while VantageScore considers a score of 661 to 780 as good. FICO boasts that 90% of top lenders rely on their scores, and consumers generally need to focus on their FICO score first. However, credit card companies will often look at both FICO and VantageScores.

How do you measure up to other borrowers?

The average FICO score in the US was 716 in 2022. And as the chart below shows, about 67% of US consumers had a good credit score or better, according to Experian. About 20% of US adults are “credit invisible” or “credit ineligible,” meaning they have no or no credit history, and as a result, no credit score.

A donut chart showing a FICO score ranges from poor to excellent

(Image credit: Experian)

The latest versions of the VantageScore also use a scale of 300 to 850, with about 61% of Americans having a good VantageScore or better.

VantageScore's donut graph ranges from poor to excellent

(Image credit: Experian)

How to check your credit score?

Many banks and credit card companies offer free FICO scores each month for customers, so check your account online. Experian, one of the three major credit bureaus, also provides a free credit score and report on To check your VantageScore, sign up for Chase Bank’s free credit monitoring service, Credit Journeyor check out the other programs it offers VantageScore partners.

Checking your credit score using FICO or Vantage, called a “soft pull,” won’t hurt your credit score. But when you apply for a credit card or loan, the lender will perform a “hard pull,” triggering a report that will temporarily lower your credit score. That’s why knowing your credit score is so important before you apply for a loan or card. If you’ve applied for several credit cards and been declined, for example, your credit score will be lower and it will be even more difficult to qualify for a new card until some time has passed and your credit score has recovered.

Why do I have more than one credit score?

There are countless factors that determine your credit score. FICO and VantageScore base their algorithms on the same underlying data, but assign different weights to the same criteria. FICO and VantageScore obtain this data from the three credit bureaus that track your credit activity: Equifax, Experian and TransUnion. As a result, you may see slightly different results based on whether data is pulled from all three bureaus or just one.

Credit bureaus and scoring algorithms also have different versions; sometimes a lender will use a score pulled from the latest version or rely on an older, even years old, version of the algorithm. For example, after a 2022 study by the Consumer Financial Protection Bureau (CFPB) found that the credit scores of one in five Americans reduced by medical debtthree bureaus have announced that they will change their credit reports to exclude some forms of medical debt.

What affects my credit score?

In all credit reporting and scoring services, these are the most important factors that affect your credit score.

Payment history it is based on your record of paying bills on time and is the most important criterion for determining your score. Late or missed payments can significantly lower your credit score.

Use of credit reflects the amount of credit you use against your credit limit. Using more than about 30% of your available credit will likely lower your score.

Length of credit history refers to the amount of time you have had your accounts. A long credit history shows that you’ve had plenty of practice managing debt payments.

Credit mix it refers to the types of loans you rely on. Having both revolving (mortgages and car loans) i rate (credit card) loans will increase your score because it shows that you can handle different types of payments and terms.

New loan accounts or applications can lower your credit score by generating a “hard pull” and reducing the average length of your credit history.

Tips for increasing and protecting your credit score

Pay your bills on time and if possible, pay the full amount each month.

Keep your credit utilization lowideally under 30% of your credit limit

Don’t close old credit card accounts. If you’re thinking about closing a credit card you’ve had for years to avoid the annual fee, consider asking your card issuer to switch your account to a similar card without a fee. Even if you never use the card, you’ll keep your long credit history.

Check your credit report and credit score periodically. Watch out for inaccurate information or fraudulent activity and be aware how to fix your credit report if you find errors.

Once you get a good, or even excellent, credit score, don’t rest on your laurels. Good credit hygiene, such as keeping track of all credit card or loan payments, can help you qualify for the loans of your choice in the future.

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The views and opinions expressed herein are those of the authors and do not necessarily reflect the views of Nasdaq, Inc.

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