Key Points
- A good credit score is generally 690 and above.
- Once your credit score gets past 720, it’s considered excellent, and you’ll get the best rates on loans and credit cards.
- The two most common credit scoring systems in America are FICO and VantageScore.
There are many different types of credit and credit scores. However, you’ll generally only need to focus on two:
- FICO Score
- VantageScore
Both of these credit scores range between 300 and 850. If you have a higher credit score, you’ll gain more opportunities and get better rates on loans and credit cards.
Today, you’ll learn more about what makes a good credit score, how to improve yours, and how you can check it completely free.
- What is a good credit score?
- What factors determine your credit score?
- How can a good credit score benefit you?
- How to get a good credit score
- How to check your credit score for free
What is a good credit score?
Generally, a credit score of 690 and above is considered a good credit score. However, the scale may change depending on which credit score you use. For example, a good FICO score is above 690, but a good VantageScore is above 661. So which score should you pay attention to?
More lenders use your FICO credit score than your VantageScore. In fact, according to the Fair Isaac Corporation, FICO scores are used by over 90% of top lenders to make lending decisions.
Does this mean lenders don’t use your VantageScore? Of course not. Additionally, lenders may use both your FICO and VantageScore to determine your creditworthiness.
These two scoring models will vary slightly. However, overall they won’t be too far apart. One score will give lenders a good idea of what the other score will be, even without checking it.
What factors determine your credit score?
Your credit score is made up of different factors, many of which are different depending on the scoring model. However, generally, the primary factors include:
- Payment history
- Credit utilization
- Age of credit history
- Total accounts
- Derogatory marks/hard inquiries
Below is a chart that shows the impact of each of these factors on your credit score. There’s also a column labeled range for best credit score. This column simply describes where you need to be to have the best possible credit score. For example, your payment history should be between 99% – 100% to have the highest score, among other factors.
| Credit factor | Impact % | Range for best credit score |
|---|---|---|
| Payment history | 35% | Between 99% and 100% |
| Credit card utilization | 30% | Between 0% and 29% |
| Age of credit history | 15% | 7+ years |
| Total accounts | 10% | 11+ accounts (credit cards, loans, etc.) |
| Hard inquiries | 10% | Under 2 hard inquiries |
How can a good credit score benefit you?
A good credit score can benefit you in several ways. In fact, you might be surprised to know that many of the financial decisions you make will typically involve your credit score, even if you don’t know it.
Here are a few examples of how having a good credit score can benefit you:
- Better rates on car loans and leases
- Ability to get a mortgage to purchase a home
- Increased approval odds for unsecured (regular) credit cards with decent interest rates
- Smaller car insurance premiums
- Renting a home or apartment (many landlords check your credit score)
- Getting a job (employers may check your credit score for stability)
As you can see, having a good credit score doesn’t only affect you getting a credit card. Your credit score is used beyond the realm of banking products and can even affect your job or where you live.
How to get a good credit score
Getting a good credit score boils down to one thing—using your credit cards (and other credit) responsibly. What does this look like? For example
- Making on-time payments. Your payment history makes up 35% of your credit score, so you must make loan or credit card payments on time.
- Paying your balances in full each month. Your credit utilization makes up 30% of your credit score. Credit utilization is simply how much of your credit line is being used at once. It’s ideal to keep it below 30%.
- Not opening too many credit lines at once. Opening too many lines of credit at once can negatively affect your score in two ways: hard inquiries and average account age. Every time you apply for a credit card or loan, the lender is pulling your credit, which negatively affects it. On top of that, your account’s average age will decrease if you open too many lines of credit at once. The older your account age, the better.
- Using a secured credit card. If you have bad credit or no credit, you can start using a secured credit card to safely build your credit.
It doesn’t matter if you have bad credit or no credit. It’s possible to get a good credit score by following the principles outlined above.
How to check your credit score for free
There are many free credit score apps and websites that you can use to get your score. Some sites are completely free, while others offer more premium features for a price. If you only want to check your credit score for free, we recommend Credit Karma.
Credit Karma is 100% free, and you never have to enter a credit card. You’ll get free credit scores from two of the three major credit reporting agencies—Equifax and TransUnion. You can also set up your account to get alerts when there are important changes on your credit reports.
If you want to really monitor your credit score and even protect yourself from identity theft, you can go with a premium service like myFICO. myFICO’s subscription comes with a $1,000,000 identity theft insurance, credit monitoring, and access to all three credit scores from the major credit bureaus.
Good credit score FAQ
What is a good credit score for getting a mortgage?
The type of mortgage you are trying to get will change the credit score requirements. For example, according to QuickenLoans, the minimum FICO credit score, you need to qualify for a conventional mortgage is 620. However, an FHA loan has a lower minimum credit score of 580.
What is a good credit score for getting an apartment?
Similar to getting a mortgage, most management companies and landlords will require tenants to have at least a 620 credit score or above. Anything lower is seen as a potential risk and may have you turned away.
What is a good credit score for getting a car loan?
Believe it or not, there isn’t a minimum credit score requirement to qualify for a car loan. Lenders set their own guidelines on how much risk they are willing to take with low credit score car buyers. You should keep in mind that the lower your credit score, the higher your interest rate. A higher interest rate translates to larger payments over longer periods.
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