Highlights:
Credit scores are calculated using information in your credit reports
Credit scores generally range from 300 to 850
Different lenders have different criteria when it comes to granting credit
It’s an age-old question we receive, and to answer it requires that we start with the basics: What is a credit score, anyway?
Generally speaking, a credit score is a three-digit number ranging from 300 to 850. Credit scores are calculated using information in your credit report, including your payment history; the amount of debt you have; and the length of your credit history.
There are many different scoring models, and some use other data in calculating credit scores. Credit scores are used by potential lenders and creditors, such as banks, credit card companies or car dealerships, as one factor when deciding whether to offer you credit, like a loan or credit card. It’s one factor among many to help them determine how likely you are to pay back money they lend.
It's important to remember that everyone's financial and credit situation is different, and there's no "magic number" that may guarantee better loan rates and terms.
Although ranges vary depending on the credit scoring model, generally credit scores from 580 to 669 are considered fair; 670 to 739 are considered good; 740 to 799 are considered very good; and 800 and up are considered excellent. Higher credit scores mean you have demonstrated responsible credit behavior in the past, which may make potential lenders and creditors more confident when evaluating a request for credit.
Lenders generally see those with credit scores 670 and up as acceptable or lower-risk borrowers. Those with credit scores from 580 to 669 are generallyseen as “subprime borrowers,” meaning they may find it more difficult to qualify for better loan terms. Those with lower scores – under 580 – generally fall into the “poor” credit range and may have difficulty getting credit or qualifying for better loan terms.
Different lenders have different criteria when it comes to granting credit, which may include information such as your income or other factors. That means the credit scores they accept may vary depending on that criteria.
Credit scores may differ between the three major credit bureaus (Equifax, Experian and TransUnion) as not all creditors and lenders report to all three. Many creditors do report to all three, but you may have an account with a creditor that only reports to one, two or none at all. In addition, there are many different scoring models available, and those scoring models may differ depending on the type of loan and lenders' preference for certain criteria.
What Factors Impact Your Credit Score?
Here are some tried and true behaviors to keep top of mind as you begin to establish – or maintain – responsible credit behaviors:
- Pay your bills on time, every time. This doesn’t just include credit cards – late or missed payments on other accounts, such as cell phones, may be reported to the credit bureaus, which may impact your credit scores. If you’re having trouble paying a bill, contact the lender immediately. Don’t skip payments, even if you’re disputing a bill.
- Pay off your debts as quickly as you can.
- Keep your credit card balance well below the limit. A higher balance compared to your credit limit mayimpact your credit score.
- Apply for credit sparingly. Applying for multiple credit accounts within a short time period may impact your credit score.
- Check your credit reports regularly. Request a free copy of your credit report and check it to make sure your personal information is correct and there is no inaccurate or incomplete account information. You’re entitled to a free copy of your credit reports every 12 months from each of the three nationwide credit bureaus by visiting www.annualcreditreport.com. By requesting a copy from one every four months, you can keep an eye on your reports year-round.Remember: checking your own credit report or credit score won'taffect your credit scores.
You can also create a myEquifax account to get six free Equifax credit reports each year. In addition, you can click “Get my free credit score” on your myEquifax dashboard to enroll in Equifax Core Credit™ for a free monthly Equifax credit report and a free monthly VantageScore® 3.0 credit score, based on Equifax data. A VantageScore is one of many types of credit scores.
If you find information you believe is inaccurate or incomplete, contact the lender or creditor. You can also file a dispute with the credit bureau that furnished the report. At Equifax, you can create a myEquifax account to file a dispute. Visit our dispute page to learn other ways you can submit a dispute.
FAQs
Although ranges vary depending on the credit scoring model, generally credit scores from 580 to 669 are considered fair; 670 to 739 are considered good; 740 to 799 are considered very good; and 800 and up are considered excellent.
What credit score is good enough? ›
For a score with a range between 300 and 850, a credit score of 700 or above is generally considered good. A score of 800 or above on the same range is considered to be excellent. Most consumers have credit scores that fall between 600 and 750. In 2022, the average FICO® Score☉ in the U.S. reached 714.
What is a good credit score? ›
There are some differences around how the various data elements on a credit report factor into the score calculations. Although credit scoring models vary, generally, credit scores from 660 to 724 are considered good; 725 to 759 are considered very good; and 760 and up are considered excellent.
What does a good credit score say about you? ›
“A high credit score means that you will most likely qualify for the lowest interest rates and fees for new loans and lines of credit,” McClary says. And if you're applying for a mortgage, you could save upwards of 1% in interest.
What is a perfect credit score? ›
A perfect credit score of 850 is hard to get, but an excellent credit score is more achievable. If you want to get the best credit cards, mortgages and competitive loan rates — which can save you money over time — excellent credit can help you qualify. “Excellent” is the highest tier of credit scores you can have.
Can I buy a house with a 780 credit score? ›
Conventional lenders now require a 780 credit score or higher to qualify for the lowest mortgage interest rates, so anything above 780 is considered an excellent score to buy a house.
Is 720 a good credit score to buy a house? ›
Home loans
Assuming you have enough income, a 720 credit score is likely high enough to help you get a government-backed mortgage such as an FHA for VA loan. However, it's probably not high enough to get the lowest interest rates available.
What is a good credit score by age? ›
How Credit Scores Breakdown by Generation
| Average FICO 8 Score by Generation |
|---|
| Generation | 2022 | 2023 |
|---|
| Generation Z (ages 18-26) | 679 - Good | 680 - Good |
| Millennials (27-42) | 687 - Good | 690 - Good |
| Generation X (43-58) | 707 - Good | 709 - Good |
2 more rowsYour credit score is a major factor in whether you'll be approved for a car loan. Some lenders use specialized credit scores, such as a FICO Auto Score. In general, you'll need at least prime credit, meaning a credit score of 661 or up, to get a loan at a good interest rate.
What credit score do you start off with? ›
There isn't a set credit score that each person starts out with. Instead, if you don't have any credit history, you likely don't have a score at all.
The minimum credit score needed for most mortgages is typically around 620. However, government-backed mortgages like Federal Housing Administration (FHA) loans typically have lower credit requirements than conventional fixed-rate loans and adjustable-rate mortgages (ARMs).
What habit lowers your credit score? ›
Making a Late Payment
Every late payment shows up on your credit score and having a history of late payments combined with closed accounts will negatively impact your credit for quite some time. All you have to do to break this habit is make your payments on time.
How long does it take to build a 700 credit score? ›
The time it takes to raise your credit score from 500 to 700 can vary widely depending on your individual financial situation. On average, it may take anywhere from 12 to 24 months of responsible credit management, including timely payments and reducing debt, to see a significant improvement in your credit score.
What's a bad credit score? ›
Poor: 300-579. Fair: 580-669. Good: 670-739. Very Good: 740-799.
What is the average credit score in the United States? ›
The average FICO credit score in the US is 717, according to the latest FICO data. The average VantageScore is 701 as of January 2024. Credit scores, which are like a grade for your borrowing history, fall in the range of 300 to 850. The higher your score, the better.
What can a 780 credit score do for you? ›
A 780 credit score is often considered very good — or even excellent. With excellent credit, your credit scores become more of a bridge and less of a roadblock — a high score can help you qualify for premium rewards credit cards, auto loans and mortgages with the best terms.
Can I buy a house with a 643 credit score? ›
Can I get a mortgage with an 643 credit score? Yes, your 643 credit score can qualify you for a mortgage. And you have a couple of main options. With a credit score of 580 or higher, you can qualify for an FHA loan to buy a home with a down payment of just 3.5%.
What will a 720 credit score get me? ›
A 720 credit score is a good credit score. The good-credit range includes scores of 700 to 749, while an excellent credit score is 750 to 850, and people with scores this high are in a good position to qualify for the best possible mortgages, auto loans and credit cards, among other things.
Is 750 a good enough credit score? ›
When your score is 750, you can rest easy that you will qualify for most financial products and get among the very best rates on them. A 750 credit score is considered excellent on commonly used FICO and VantageScore scales, which range from 300 to 850.
