What Is a Good Credit Score?
On February 25, 2026 By newsroom Topic: Debt Advice
Key Insights
- Credit scores range from 300 to 850. A score above 670 is generally considered good.
- Lenders use credit scores to determine your creditworthiness and the interest rates you"9ll be offered.
- Other factors, like income, employment history, and debt-to-income ratio (DTI), also affect lending decisions.
- Closing old accounts can hurt your score by impacting your credit utilization ratio and credit history length.
What Defines a Good Credit Score?
- Ranges:
- Excellent: 800 - 850
- Very Good: 740 - 799
- Good: 670 - 739
- Fair: 580 - 669
- Poor: Below 580
- Impact of Good Scores:
- Higher scores mean better chances of loan approval and lower interest rates.
- Regularly check your credit score and reports to stay informed about your financial health.
Factors Influencing Credit Scores
- Payment History (35%):
- On-time payments boost your score. Missed payments significantly harm it.
- Credit Utilization (30%):
- Keep usage below 30% of your total credit limit.
- Example: A $500 balance on a $1,000 limit equals a 50% utilization ratio.
- Length of Credit History (15%):
- Older accounts positively impact your score. Closing old accounts may lower it.
- Types of Credit (10%):
- A mix of credit cards, loans, and mortgages is favorable.
- Recent Credit Inquiries (10%):
- Too many applications for credit in a short time can hurt your score.
VantageScore vs. FICO Score
- Differences in Models:
- FICO is used in 90% of U.S. lending decisions.
- VantageScore may weigh factors like credit age more heavily.
- Inquiry Treatment:
- VantageScore treats multiple inquiries within 14 days as a single inquiry, even across loan types.
- FICO may count them separately.
FAQs
- What's a good credit score for my age?
- Younger people often have lower scores due to limited credit history. On-time payments and responsible credit use can build a strong score early.
- Is checking my credit score OK?
- Yes, checking your own score is a "csoft inquiry" and doesn't impact your credit.
- How can I raise my credit score?
- Pay bills on time, reduce your credit utilization, and avoid opening too many new accounts.
Bottom Line
A good credit score (670+) is crucial for securing loans with favorable terms. Understanding what affects your score - like payment history and credit utilization - can help you manage your finances better and achieve long-term financial goals.
