Credit scores generally range from 300 to 850, with the highest numbers characterized as “exceptional” or “excellent” and the lowest scores labeled as “poor” or “very poor.” Whatever range your score falls in has implications for your ability to qualify for credit.
Many consumers know a credit score consists of three digits, but some may not know exactly what those numerals actually mean.
FICO scores and VantageScores — the two most widely used scoring models — range from 300 to 850.
In this article, we’ll discuss the different credit score ranges, the factors that contribute to them and how to improve your credit score.
What are the different types of credit scores?
If you’ve ever checked your credit score, you’ve probably been shown a three-digit FICO score or VantageScore ranging from 300-850.
FICO scores are used by 90 percent of top lenders, according to the organization behind the score. FICO scores range from 300 to 850 and are calculated using the five main categories of your credit report: payment history, credit utilization, length of credit history, credit mix and new credit. Here’s how the FICO score range works:
- 800-850: Exceptional
- 740-799: Very good
- 670-739: Good
- 580-669: Fair
- 300-579: Poor
Here’s how each scoring factor works:
- Payment history (35 percent): This is a record of on-time credit card and loan payments, and also any negative marks such as missed payments, collection items and charge-offs.
- Credit utilization (30 percent): This shows how much of your overall available credit you’re using. A general rule of thumb is to keep your credit utilization below 30 percent, but the lower the better.
- Length of credit history (15 percent): This simply shows how long you’ve been using credit, considering factors such as your average age of accounts and the ages of your oldest and newest accounts.
- Credit mix (10 percent): This factor considers what types of accounts you own and manage. A mix of both revolving and installment accounts is generally better for your score than just one type of account.
- New credit (10 percent): Your score could be temporarily lowered if you’ve opened up several new accounts in a short time period, but the impact wanes over time as your accounts age.
VantageScore is a relatively young credit scoring model developed by the three major credit bureaus — Equifax, Experian and TransUnion. Here’s how the VantageScore range works:
- 781-850: Excellent
- 661-780: Good
- 601-660: Fair
- 500-600: Poor
- 300-499: Very poor
There are four key factors that VantageScore considers:
- Payment history (extremely influential)
- Credit age, credit utilization, and credit mix (highly influential)
- Account balances and debt (moderately influential)
- Available credit and recent credit behavior (less influential
What is a good credit score?
As you can see above, a good FICO score is in the 670-739 range, and a VantageScore of 661-780 is considered good. This kind of score can help you qualify for a variety of credit cards that offer generous rewards and other benefits, especially if your score is above 700. However, you might need to be at the top of the “good” range or higher to obtain premium rewards cards with the most lavish perks.
A good credit score can also help you get a relatively low interest rate — an important consideration given that the average credit card APR is well above 19 percent.
What is a bad credit score?
A bad credit score is a FICO score below 580 and a bad score in the VantageScore model is one below 601, both of which fall in the fair or poor credit ranges.
For people with poor credit scores, qualifying for loans and credit cards with favorable terms is often difficult.
A low score can make it harder to borrow and lead to higher interest rates if you do qualify. It can also impact rental applications, insurance costs, utility deposits and credit limits. If you have a low score, a lender may believe you’re more likely to pay late or default on a loan.
You may have low credit because you’ve missed payments, used too much available credit, applied for a lot of credit in a short time or defaulted on your accounts.
How can you improve your credit score?
Why does your credit score matter so much? It’s a reflection of how you manage credit and is used by lenders to assess your risk level.
If you have a low credit score, or you’re in the “good” range and want to move up to a level such as “very good” or “exceptional,” it’s possible to improve it. Strategies for this include:
- Pay your bills on time, every time.
- Pay your balances in full every month. If you must carry a balance on a credit card, keep it as low as possible.
- Apply for credit only when you need it.
- Avoid closing credit card accounts, especially if they’re older and have a positive history.
- Keep a healthy mix of revolving accounts and installment accounts.
Remember that your credit score is not permanent. Negative marks will usually diminish over time, falling off after seven years. You can always improve your score, but it may take time depending on what is hurting your credit and the steps you are taking to rebuild it.
Good credit scores can unlock a world of benefits, from access to more financial products to lower interest rates.
If you’re already at or near the top — sitting pretty between 800 and 850 — you can probably qualify for almost any credit card you want, with no need to focus on climbing higher. But even if your score falls within the “good” range, it’s worth setting your sights a little higher.
Correction, Feb. 10, 2023, 2:01 pm, ET: This article has been updated to correctly reflect VantageScore’s key credit score considerations in order of significance, from extremely influential to less influential. Additionally, an earlier version of this article stated that a bad credit score for FICO was below 670 while VantageScore was below 661. This has since been corrected to below 580 for FICO and below 601 for VantageScore.