What is a good credit score?

Key Takeaway
The definition of a "good" credit score varies based on what you're using it for, and who is reporting the score. Across credit reporting bureaus, a 'good' score tends to fall in the range between mid 600s to high 700s. Our guide spells out everything you need to know about credit scores and what a high score can do for you.

Everyone says that a good credit score is absolutely essential for a great financial future. However, the question that’s on everyone’s mind is: “What IS a good credit score?

Don’t worry if you don’t know–few people know about the intricacies of a good credit score. Whether you're buying a home, car, or trying to secure a personal loan, your excellent credit score is essential to having the good things in life without having to jump through hoops. Homebody understands, which is why we offer this guide to break down what makes a good credit score range "good" and why it matters.

What is a good FICO score?

A “good” FICO credit score is 670 - 739.

What is a good VantageScore?

A "good" VantageScore typically falls within the range of 661 to 780. 

What is the average credit score in the US?

According to FICO, the average American credit score is around 723

A snapshot of credit score ranges

Credit scores are numerical representations of your creditworthiness. The widely used FICO score categorizes scores as follows:

Poor: 300-579

Fair: 580-669

Good: 670-739

Very good: 740-799

Exceptional: 800-850

As you can see, a “good” credit score is 670 - 739. To see what each credit score gives you, take a look at the following breakdown:

FICO credit rating

Excellent (781-850)

  • Very low risk, strong credit history
  • Longer loan terms, lower interest rates
  • High credit limits
  • Very low interest rates

Good (661-780)

  • Low risk, responsible credit use
  • Standard loan terms, competitive interest rates
  • Moderate to high credit limits
  • Low to moderate interest rates

Fair (601-660)

  • Moderate risk, some credit challenges
  • Shorter loan terms, slightly higher interest rates
  • Moderate credit limits
  • Moderate interest rates

Poor (501-600)

  • High risk, credit issues
  • Short loan terms, higher interest rates
  • Limited credit limits
  • High interest rates

Very poor (300-500)

  • Very high risk, significant credit issues
  • Shortest loan terms, very high interest rates
  • Very limited credit limits
  • Very high interest rates

FICO vs. VantageScore

You should know that FICO isn’t the only free credit score now available. Used by financial institutions and utility companies alike, the VantageScore offers a similar rating to FICO scores.

Very poor: 300 - 499

Poor: 500 - 600

Fair: 601 - 660

Good: 661 - 780

Excellent: 781 - 850

VantageScore has a number of criteria that is different than FICO credit scores. And while delving into the particulars of VantageScore’s is a bit beyond the scope of this guide, you should know that the results of the two scores are virtually the same. 

As a pro tip, find out which credit score is used for what you want to do. For example, if you’re looking to get a car loan, your VantageScore should be a high priority. For a home loan, keep an eye on your FICO score. 

How long does it take to get a good credit score?

The time it takes to achieve a good credit score can vary significantly depending on your starting point, financial behavior, and individual circumstances. Building a good credit score is a gradual process that involves responsible credit management over time. Here are some general timelines to consider:

  • Starting from no credit history: if you're starting with no credit history (no credit accounts or loans), it might take several months to a year to establish a credit profile and begin building a credit score.
  • Building from fair to good: if you have fair credit (a score in the 600-660 range), improving it to a good range (around 661-780) might take anywhere from 6 months to a few years. This depends on factors like paying bills on time, reducing credit card balances, and managing your credit responsibly.
  • Rebuilding poor credit: If you have poor credit (a score below 600), rebuilding it to a good score can take longer, possibly a few years or more. It involves consistently making on-time payments, addressing negative items on your credit report, and managing credit utilization.

Here are some key factors that can influence calculating credit scores and the speed of improving your credit score:

  • Payment history: consistently paying bills on time is crucial for improving your credit score. Positive payment history over time demonstrates reliability.
  • Credit utilization: keeping credit card balances low relative to your credit limits (usually below 30%) can positively impact your score over time.
  • Credit mix: having a mix of different types of credit (e.g., credit cards, loans) can demonstrate your ability to manage various financial responsibilities.
  • Length of credit history: the longer your credit history, the more information lenders have to assess your creditworthiness.
  • Recent activity: recent credit inquiries and new accounts can impact your score temporarily. Avoid opening multiple new accounts in a short period.
  • Negative items: addressing negative items, such as late payments or collections, can gradually improve your score as they age and become less significant.
Pro tip: if you're working on improving your credit, it's a good idea to set realistic goals and seek advice from financial professionals or credit counseling services if needed.

Why a "good" score matters:

Having a good credit score opens up avenues for better financial opportunities and terms. Some of the benefits include:

  • Favorable interest rates
  • Higher loan approval chances
  • Better credit card offers
  • Rental and housing approvals

Favorable interest rates

Favorable interest rates refer to lower interest rates that borrowers can qualify for when taking out loans or using credit. Lenders offer better interest rates to borrowers with good credit scores because they consider them lower risk. This means that individuals with good or excellent credit scores will pay less in interest over the life of a loan, saving them money. For example, if you have a good credit score when getting a mortgage or an auto loan, you're likely to be offered a lower interest rate compared to someone with a lower credit score.

Higher loan approval chances

Having a good credit score increases your chances of being approved for various types of loans, such as personal loans, auto loans, and mortgages. Lenders view individuals with good credit as reliable borrowers who are more likely to make payments on time. This improves your overall eligibility for loans and makes the application process smoother. If you have a good credit score, lenders are more likely to see you as a low-risk borrower, increasing your chances of loan approval.

Better credit card offers

A good credit score opens the door to more attractive credit card offers. You're likely to receive offers for credit cards with lower interest rates, higher credit limits, and more appealing rewards programs. These credit cards might offer cashback, travel rewards, or other perks that can save you money or enhance your spending experience. Good credit can also help you qualify for premium credit cards that come with exclusive benefits and features.

Rental and housing approvals

When you're looking to rent an apartment or a house, landlords often check your credit history to assess your financial responsibility. With a good credit score, you're more likely to be approved for the rental property you're interested in. Landlords see a higher credit score as an indication that you're likely to pay rent on time and meet your financial obligations.

What is a good credit score to buy a house?

Credit Score Range


Mortgage Terms & Interest Rates

Average Mortgage Terms

Average Interest Rates

Credit score range: 760 - 850

  • Excellent: low risk
  • Most favorable rates and terms
  • Typical mortgage term: 30 years
  • Typical interest rate: around 3.00% - 3.50%

Credit score range: 700 - 759

  • Good: competitive rates
  • Competitive rates and favorable terms
  • Typical mortgage term: 30 years
  • Typical interest rate: around 3.50% - 4.00%

Credit score range: 650 - 699

  • Fair: slightly higher rates
  • Rates might be somewhat higher
  • Typical mortgage term: 30 years
  • Typical interest rate: around 4.00% - 4.50%

Credit score range: 600 - 649

  • Poor: higher rates
  • Higher rates, stricter requirements
  • Typical mortgage term: 30 years
  • Typical interest rate: round 4.50% - 5.00%

Credit score range: 300 - 599

  • Very poor: limited options
  • Limited options, higher rates, alternative loans
  • Typical mortgage term: varies
  • Typical insurance rate: varies

What is a good credit score to buy a car?

The following shows what you’d expect when purchasing a new or used vehicle based on your credit score:

VantageScore credit score ranges:

781 - 850 Excellent credit: qualifies for the best loan terms.

661 - 780 Good credit: likely to qualify for competitive rates.

601 - 660 Fair credit: may face higher rates or stricter terms.

501 - 600 Poor credit: higher rates, larger down payments.

300 - 500 Very poor credit: may struggle to get approved.

FICO score ranges:

800 - 850 Excellent credit: qualifies for the best loan terms.

700 - 799 Good credit: likely to qualify for competitive rates.

600 - 699 Fair credit: may face higher rates or stricter terms.

300 - 599 Poor credit: higher rates, larger down payments.

What is a good credit score to get a job?

Here’s an interesting aspect of credit scores that not many people are aware of: 

In many cases, employers may check credit reports as part of the hiring process, especially for positions that involve financial responsibilities or access to sensitive information. However, the minimum credit score requirements for getting a job can vary widely depending on the employer, the nature of the job, and the industry.

There is no universal "good" credit score specifically for getting a job, as employers consider various other factors, beyond just the credit score. Instead, they may look at your overall credit history, checking for any negative items that could raise concerns about financial responsibility.

Here's a general overview of how credit scores might be considered in the context of job applications:

  • Excellent credit: a high credit score is likely to be viewed positively by employers, especially for roles that involve financial management, handling company funds, or accessing sensitive financial data.
  • Good credit: a solid credit history can reflect responsible financial behavior and enhance your candidacy for jobs that may involve handling money or confidential information.
  • Fair credit: while a fair credit score might not be a deal-breaker for many jobs, it could be a factor in positions where financial responsibility is crucial. Employers may assess the details of your credit history to determine if any red flags exist.
  • Poor credit: for positions that require financial trust or access to sensitive information, a poor credit history might raise concerns for employers. However, not all jobs will heavily weigh credit scores in their hiring decisions.

It's important to note that not all employers check credit reports, and even when they do, they are typically required to get your permission before doing so. Additionally, laws and regulations related to employment credit checks vary by country and jurisdiction. 

If you're concerned about how your credit history might impact your job application, you can consider reviewing your credit report beforehand to ensure accuracy and address any errors or negative items.

What is a good credit score by age?

While the definition of a "good" credit score doesn't change with age, younger individuals might have lower credit scores fall due to shorter credit histories. Generally:

  • 18-24: Young adults are building their credit, so scores might be lower.
  • 25-34: Scores should rise as this group has had more time to establish credit.
  • 35-44: Most in this age range have longer credit histories, leading to potentially higher scores.
  • 45 and older: Scores might plateau or increase, assuming continued responsible credit use.

Benefits of good credit at a glance

Lower interest rates: good credit scores often lead to lower interest rates on loans and credit cards. This means you'll pay less in interest over time, saving you money.

Higher chance of approval: lenders are more likely to approve your credit applications, including loans and credit cards, when you have good credit.

Better loan terms: you'll have access to more favorable loan terms, such as longer repayment periods and lower monthly payments.

Higher credit limits: lenders are more willing to offer higher credit limits on credit cards for individuals with good credit.

Easier rental applications: landlords are more likely to approve rental applications and require a lower security deposit for individuals with good credit.

Employment opportunities: some employers may check credit history as part of the hiring process, and good credit can reflect positively on your financial responsibility.

Lower insurance premiums: good credit can lead to lower insurance premiums for auto, home, and renters insurance.

Access to premium rewards: credit cards with rewards programs, cashback offers, and travel benefits are more accessible to those with good credit.

Negotiating power: you can negotiate better terms and rates with lenders when you have a strong credit profile.

Faster loan approval: good credit can lead to quicker mortgage loan approval processes, making it easier to take advantage of time-sensitive opportunities.

Security deposits: utility, credit card companies and service providers may waive security deposit requirements for individuals with good credit.

Better rental housing: good credit makes it easier to secure rental housing, especially in competitive rental markets.

Lower cost of borrowing: over the long term, good credit can result in significant savings due to lower borrowing costs.

Financial flexibility: with good credit, you have more financial options and can take advantage of opportunities as they arise.

Improved financial reputation: maintaining good credit contributes to a positive financial reputation and demonstrates responsible money management.

Reduced stress: good credit helps you avoid financial stress, as you're more likely to have access to affordable credit when you need it.

Improving your credit score: steps you can take for a brighter financial future

Regardless of where your credit score currently stands, taking steps to improve it can offer substantial benefits. Here's a guide:

Consistent and timely payments

  • Making payments on time for credit accounts and utility bills.
  • Paying credit card bills, car loan installments.

Limiting hard credit inquiries

  • Minimizing the number of times your entire credit report is checked.
  • Applying for new credit sparingly.

Maintaining a low credit utilization

  • Keeping credit card balances below 30% of total credit limit.
  • Keeping your credit card balances low compared to limits.

Monitoring and reporting errors

  • Regularly checking your credit report for inaccuracies.
  • Reviewing credit bureau reports for incorrect info.

How Homebody helps improve your credit score

At Homebody, we understand the significance of paying your rent on time and how it impacts your creditworthiness. Our Rent Reporting service is designed to make this easy – for a small monthly fee, your punctual rent payments are reported to credit bureaus. It's a straightforward method to improve your credit and unlock better financial opportunities.

But wait, there's more! We've got a smart solution that enhances your credit score while you continue meeting your rent obligations. No need to worry about hefty deposits – our innovative Deposit Alternative offers low insurance premiums (starting at around $10/month), saving you money upfront.

And it's not just about fixing your credit. At Homebody, we're all about boosting your overall financial well-being. Our hassle-free signup process for Renters Insurance takes just about 7 clicks and less than 5 minutes. What's more, you can secure renters insurance during the leasing process, ensuring you're protected from day one.

Join Homebody today and experience how we're revolutionizing the way you manage your finances – from elevating your credit to effortlessly settling into your new place.

Understanding your credit score: frequently asked questions (FAQ)

What affects your credit score?

Multiple factors can negatively affect your credit score, including:

  • Payment history - Late or missed payments can lower your score.
  • Credit utilization - High balances relative to credit limits can be negative.
  • Length of credit history - A longer history generally benefits your score.
  • Type of credit used - A diverse mix of credit types is beneficial.
  • Recent credit inquiries - Multiple hard inquiries in a short period can lower your score.
  • Public records - Bankruptcies, tax liens, and judgments can negatively impact your score.

What are the VantageScore factors for my credit score?

VantageScore factors include:

  • Payment history: critical aspect detailing your payment punctuality.
  • Age and type of credit: the mix and time frame of your accounts.
  • Credit utilization: the ratio of current credit card balances to credit limits.
  • Total balances/debt: total amount of debt you owe.
  • Recent behavior: new credit applications and behavior.
  • Available credit: amount of credit you have available.

How do I get lower interest rates with my credit score?

Credit scores influence the interest rates offered to consumers. Those with higher credit scores generally receive lower interest rates because they're perceived as lower risk by lenders. A higher credit score signals responsible financial behavior, making lenders more confident about timely repayments.

What is meant by payment history for credit reports?

Payment history is a record of your payments on credit accounts, including whether you've paid on time. It's a significant factor in most credit scoring models because it's an indicator of your financial reliability. Late or missed payments extend credit and can negatively impact your credit score.

Why there are different credit scores?

Different credit scores exist because various companies and credit scoring models calculate scores based on their criteria. For instance, FICO® and VantageScore are two popular credit scoring system and models, but they weigh credit factors slightly differently. Additionally, lenders might customize these models based on their specific needs. Moreover, scores might differ between credit bureaus due to the data they have on file.

Is 740 credit score good or bad?

A 740 credit score is generally considered "very good" on the credit score scale. This means individuals with this very good credit score range, are likely to be viewed favorably by lenders and qualify for a wide range of credit offers with competitive interest rates.

Conclusion: get peace of mind with Homebody

A good credit score is a valuable asset that opens doors to favorable financial opportunities. Whether you're aiming to buy a home, secure a loan, or simply enjoy lower interest rates, having a good credit score can pave the way for a financially secure future.

Ready to protect your finances? Get a quote at Homebody!

At Homebody, we believe in empowering you with the knowledge to make informed financial decisions. Your credit journey matters, and we're here every step of the way. Homebody offers a wealth of financial knowledge so you can make the best decisions for you, your family, your home, and everything else you value in life!

Get a quote with Homebody today and enjoy the peace of mind you deserve.

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