What is a Good Credit Score?

An impressive credit score is often defined as having a FICO® rating above 670. When you're considering a credit card, car loan, or mortgage, lenders heavily rely on this three-digit assessment to gauge your financial credibility, making it a significant factor in their decision to extend you financial opportunities. Understanding how this rating is calculated …

A cartoon image of a man holding a pencil looking over his report. "What is a good credit score?" he wonders.

An impressive credit score is often defined as having a FICO® rating above 670. When you’re considering a credit card, car loan, or mortgage, lenders heavily rely on this three-digit assessment to gauge your financial credibility, making it a significant factor in their decision to extend you financial opportunities.

Understanding how this rating is calculated can demystify the world of personal finance and help you manage or potentially improve your financial standing. In this article, we will dissect the factors determining what constitutes a favorable financial standing, explore the components that contribute to this assessment, and provide insights on how to achieve a high financial rating, if not the elusive perfect one.

What Qualifies as a Good FICO Credit Score?

If your financial rating falls within the range of 670 to 740, congratulations! According to the FICO scoring model, this is considered a favorable financial standing. This range brings various benefits, including lower interest rates on loans, increased rental options, and access to financial products offering lower APRs and enhanced rewards.

What Constitutes a Good VantageScore?

For lenders using VantageScore, a good credit score typically falls between 661 and 780. Although FICO is more widely utilized, VantageScore, affiliated with the three major credit bureaus, also serves as a credible metric for evaluating creditworthiness.


Both FICO and VantageScore credit scores adhere to a scale ranging from the lowest credit score of 300 to the maximum credit score of 850, with the following classifications:

  • Poor: Below 580
  • Fair: 580-669
  • Good: 670-739
  • Very good: 740-799
  • Exceptional: 800 and above

Factors Impacting Your Credit Score

Two primary credit scoring systems, FICO and VantageScore, determine credit scores, with differences in how they weigh individual scoring factors. Although they both employ the 300-850 scale, FICO’s scoring system is more prevalent, and most credit score references pertain to it. These systems evaluate credit based on factors such as:

  1. Payment history (FICO, 35%; VantageScore, 41%): The regularity of your past account payments is of paramount importance to lenders.
  2. Amounts owed/utilization (FICO, 30%; VantageScore, 20%): While using a portion of your credit can be beneficial, excessive use may indicate overextension.
  3. Length of credit history (FICO, 15%): This includes the duration of open accounts and the time since your last account activity.
  4. Credit mix (FICO, 10%): Diverse types of credit (e.g., mortgages, car loans, credit cards) are favorable, but each account must be managed responsibly.
  5. Age and mix of credit (VantageScore, 20%): VantageScore consolidates the previous two factors into a single element.
  6. New credit (FICO, 10%; VantageScore, 11%): Opening numerous new accounts quickly can raise red flags for lenders, who consider the timing between account openings.
  7. Balance (VantageScore, 6%): Your overall credit balance plays a minor role in your VantageScore.
  8. Available credit (VantageScore, 2%): This factor has the least weight in determining your score.

Factors Excluded from Your Credit Score

Certain financial aspects have no direct impact on your credit score, including:

  • Debit card, cash, or ACH payments
  • Marital status
  • Income changes
  • Credit application denials
  • Interest rates on existing credit lines
  • Credit counseling
  • Soft credit inquiries

While these factors don’t directly affect your credit score, they can influence other aspects of your financial profile that do. For instance, an income increase leading to lower credit utilization could improve your credit score.

The Significance of Your Credit Score

A favorable credit score holds substantial importance as it can:

  • Facilitate credit approval, enhancing your chances of being approved for credit cards and loans.
  • Secure lower interest rates, saving you money on finance charges and improving loan terms.
  • Unlock various rewards, including credit card perks and cashback incentives.
  • Expand credit limits, reflecting the trust banks have in your financial responsibility.
  • Streamline rental approval, as landlords often perform credit checks to assess tenant reliability.
  • Reduce security deposits, as utility companies may be less likely to request deposits from individuals with good credit.

Achieving a Good Credit Score

If your credit score doesn’t meet the criteria for “good,” there are steps you can take to improve it:

  • Consistently pay bills on time, as payment history carries significant weight in your credit score.
  • Reduce debt strategically by focusing on high-interest balances first.
  • Avoid opening unnecessary credit accounts, as too many accounts in a short period may appear risky.
  • Keep credit utilization low, ideally under 30% of your total credit limit on each account.
  • Maintain your oldest credit accounts, which contribute to your credit history length.

Checking Your Credit Score

Several methods allow you to access your credit score, but keep in mind that different services may yield different scores based on the credit reporting company they use.

  • Contacting your credit card or loan company.
  • Consulting a credit counselor who offers free credit reports and reviews.
  • Using a 3B monitoring service.

Frequently Asked Questions

If you lack a history, you may not have a credit score since they rely on credit report data. To establish credit, consider applying for a credit card or becoming an authorized user on someone else’s account.

A credit score above 670 is considered good and should increase your chances of obtaining a low mortgage interest rate.

The highest attainable credit score is 850, while any score above 800 is deemed “exceptional.”

Understanding your score is crucial for achieving financial goals. Whether aiming for a perfect score or improving your current standing, factors influencing your creditworthiness are within your control. Adopt responsible financial practices, like timely payments and prudent debt management, to pave the way toward financial well-being. Your credit score is a powerful tool that can open doors to opportunities.

If you ever need expert assistance or guidance on your credit journey, don’t hesitate to reach out to the Nerds! Additionally, stay updated with the latest tips and information by following us on Facebook, Instagram and Tiktok!

Eric Counts

Eric Counts

Eric Counts is the visionary entrepreneur behind CreditNerds.com, a leading name in the credit repair and business funding industry. With a passion for financial empowerment and a commitment to helping individuals and businesses achieve their financial goals, Eric has built CreditNerds.com into a trusted resource for credit repair and funding solutions.

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