What is a good credit score, and how can you get one?

Your credit scores are a reflection of how responsibly you manage credit. The higher your scores, the better you look to lenders. According to FICO, the most widely used credit-scoring model, a good credit score is between 670 and 739. In 2023, 67% of Americans had good scores or better, according to Experian.

Having good credit can open the door to better loan rates, higher credit limits and even job offers, lower insurance premiums and housing approvals. But building good credit takes time, persistence and good financial habits, like paying your bills on time and not maxing out your credit lines.

What qualifies as a good credit score?

The two most common credit-scoring models are FICO and VantageScore, each of which typically uses a credit score range of 300 to 850. A good FICO Score is between 670 and 739, while you’ll need a VantageScore of 661 to 780 to be classified as having good credit.

FICO Score	VantageScore
Poor: 300 to 579	Very poor: 300 to 499
Fair: 580 to 669	Poor: 500 to 600
Good: 670 to 739	Fair: 601 to 660
Very good: 740 to 799	Good: 661 to 780
Exceptional: 800 to 850	Excellent: 781 to 850

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Why are good credit scores important?

A good credit score is an asset that can positively impact your entire financial journey.

Consider significant financial milestones, like buying a house, paying for college or financing a new business. Having good credit scores makes it easier to get a loan and secure better loan terms. A few interest rate percentage points can translate into considerable savings over the life of a loan.

Example: Applying for a personal loan with good credit can save you thousands of dollars in the long run, compared to the same loan with bad credit. Consider the following $20,000 loan with a five-year repayment term:

	Good credit	Bad credit	Savings
APR	25.00%	35.99%	—
Monthly payment	$587	$723	$136
Total interest paid	$15,222	$23,352	$8,130

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Good credit scores will not only save you money but also allow you to access credit cards that offer perks like cash back and travel rewards. And guess what? Employers and landlords might also look at a pared-down version of your credit history to assess your responsibility.

What factors affect your credit scores?

Your credit scores are calculated based on the information in your credit reports, which include details about all of your credit accounts, unpaid accounts in collections, recent credit inquiries and bankruptcies. Using that information, the following factors determine your credit scores on the FICO model:

• Payment history (35%): Late and missed payments have a lasting, negative impact on your scores. That’s why paying your bills on time is essential — it shows lenders that you manage your credit responsibly.
• Amounts owed (30%): This category reflects the amount of credit you’re currently using compared to your total available credit. It’s sometimes called your credit utilization ratio. Using a high percentage of your available credit may indicate that you’re close to being overextended.
• Length of credit history (15%): A longer credit history generally translates to higher credit scores, assuming you’ve managed your credit responsibly. That’s why it’s helpful to maintain your oldest credit card accounts, perhaps by adding one small recurring charge (such as a utility bill) to each of them.
• Credit mix (10%): It benefits your scores to have a variety of accounts on your reports, including both installment accounts (like a mortgage, student loan or auto loan) and revolving credit lines, like credit cards. But it’s generally not worthwhile to take on new debt just to improve your credit mix.
• New credit (10%): This category considers how many new accounts you have, how many recent credit inquiries you’ve initiated and how long it’s been since you opened a new account. Applying for a lot of new credit can lower your scores, since it drops your average credit age, increases your amounts owed and results in a hard credit inquiry.

How is my VantageScore calculated?

Like FICO, VantageScore places a heavy emphasis on payment history. The most recent VantageScore model (4.0) weighs the following factors:

Factor	Weight
Payment history	41%
Depth of credit (credit age)	20%
Credit utilization	20%
Recent credit	11%
Balances	6%
Available credit	2%

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6 tips to build good credit scores

1. Make all debt payments on time. Over time, a history of prompt payments makes the biggest impact on your scores. In fact, a single missed payment can drop your scores by 50 to 100 points, according to FICO. Focus on making timely payments and consider enrolling in autopay to avoid missing one by mistake.
2. Keep credit card balances low. Many credit card experts recommend keeping your balances below 10% of your credit limit — but not using your cards at all can actually have a negative effect. Paying off credit card debt can boost your credit scores and free up money for other purposes.
3. Be conservative about opening new accounts. New credit inquiries can temporarily drop your credit scores by about five points, so it’s best to only open new accounts when necessary.
4. Check your credit reports for errors. About 27% of credit reports had errors serious enough to impact credit scores, according to a recent Consumer Reports study. If you find a credit report error, such as a payment incorrectly marked as late or an account that doesn’t belong to you, dispute the error with the reporting credit bureau. If the information is proven to be incorrect, the bureau will remove it from your credit report.
5. Ask for a higher credit card limit. A credit limit increase can lower your credit utilization, increasing your scores. But be responsible in how you use that extra credit — if you’d be tempted to spend more than you can afford to repay, this strategy may not make sense.
6. Keep old cards open. It can be tempting to close old credit cards you’ve paid off since you may no longer use them. But if your card doesn’t have an annual fee or otherwise costs you money, keeping these open is usually best. Closing a card lowers your overall available credit, which can increase your credit utilization, and the age of the card will no longer benefit the length of your history. Use the card occasionally to keep it active and repay the balance in full each month.
7. Be patient. Improving your credit scores won’t happen overnight. It can take months (or even years) to make a meaningful impact on your scores, depending on the information on your reports. Keep practicing healthy financial habits, and you’ll eventually be rewarded with good credit scores.

Common myths about credit scores

Myth 1: Checking your credit hurts your scores

This is one of the most persistent myths about credit scores, but the idea that checking your credit reports or scores can harm them couldn’t be further from the truth. Checking your credit results in a “soft inquiry” and doesn’t impact your scores. In fact, it’s a responsible habit to regularly review your credit report for errors and keep tabs on your scores.

You can request a free copy of your credit reports from each of the three major credit bureaus — Equifax, Experian and TransUnion — via AnnualCreditReport.com as often as once a week. You may have free access to your credit scores through your bank or credit card issuer, or you can view your FICO Score for free from myFICO.

Myth 2: Closing credit cards boosts your scores

Closing credit cards can actually lower your scores. That’s because when you close an account, you reduce your available credit, which can lead to a higher credit utilization ratio. A better approach is to keep your oldest accounts open (assuming the annual fee isn’t prohibitive or the issuer has agreed to waive it), as they can positively impact the length of your credit history.

Myth 3: A higher income means higher scores

Your income has no bearing on your credit scores. A lower income paired with responsible credit management will lead to stronger credit scores than a higher income paired with irresponsible behavior. While a higher income may make it easier to pay your bills, your credit scores are based on how well you handle your credit.

Credit score statistics

The average consumer had a FICO Score of 715 in 2023, based on the January 2024 data from Experian. That places them squarely in the “good credit” category. Here’s a look at how many consumers fall into each credit bracket — how do your scores measure up?

Average credit scores by age

Your age isn’t accounted for in your credit scores, but since it takes time to build credit, older consumers tend to have stronger scores than their younger counterparts. On the other hand, older generations have also had more time to experience credit mishaps. Here are the average scores by generation:

Generation	Average credit score
Silent Generation (1928 to 1945)	760
Baby Boomers (1946 to 1964)	745
Generation X (1965 to 1980)	709
Millennials (1981 to 1996)	690
Generation Z (1997 to 2012)	680

Source: Experian, Q3 2023

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Average credit score by state

Your location also isn’t a factor in your credit scores, but some states tend to have higher scores than others. For example, the highest average credit scores can be found in Minnesota, while consumers in Mississippi have the lowest average scores. Overall, 33 states have scores at or above the national average.

Refresher: Understanding credit scores

Credit scores serve two purposes: First, they help lenders make informed decisions about who to loan money to. Second, they help borrowers have fair access to credit by standardizing lending criteria.

Since some creditors report accounts to one bureau and not the others, the information on each of your credit reports can vary. Therefore, your scores can vary depending on which report was used and which scoring model was applied.

The good news is that you don’t need a perfect credit score to qualify for the best loan terms. Once your scores reach the upper 700s, you can generally expect to access a lender’s lowest rates, assuming other criteria (like debt-to-income ratio) are met.

Additional reporting by Devon Delfino