What is a good FICO credit score?

Key Takeaway
Credit scores, especially your FICO score, can help you achieve your financial goals. Your credit score is used to determine just how “creditworthy” you actually are in the eyes of lenders, or how responsible you are in the eyes of potential employers. But before we get ahead of ourselves, what is exactly a 'good' FICO score? Here's a quick breakdown of everything you need to know.

What is a good FICO credit score?

Credit scores, especially your FICO score, can help you achieve your financial goals. Your credit score is a factor in everything from home loans, car loans, interest rates you pay on a credit card, and even your career path going forward. Your credit score is used to determine just how “creditworthy” you actually are in the eyes of lenders, or how responsible you are in the eyes of potential employers.

But before we get ahead of ourselves, what is exactly a 'good' FICO score? 

At Homebody, we're here to clarify this often misunderstood topic. In this article, we delve into the intricacies of credit scores, explore their significance, and actionable tips you can start using today. Let's dive in!

What is a good credit score?

A FICO score of 670 to 739 is generally considered "good."

What each individual lender refers to as "good" can vary, but "good" often means a score in the upper 600s to mid-700s.

FICO score ranges

Here's a list of FICO score ranges:

- Exceptional: 800+

- Very good: 740-799

- Good: 670-739

- Fair: 580-669

- Poor: 300-579

Now, let's explore how each range of FICO scores can impact you.

The impact of your credit score on your financial future

Having a good FICO credit score can come with a range of perks and benefits. Here are some of the advantages you might enjoy:

  1. Lower interest rates: lenders typically offer lower interest rates on loans and credit cards to individuals with good credit scores. This can save you money on interest payments over time.
  2. Better loan terms: with a good credit score, you're more likely to qualify for favorable loan terms, including longer repayment periods and lower fees.
  3. Higher credit limits: lenders may be more willing to provide higher credit limits on credit cards for individuals with good credit scores, giving you more financial flexibility.
  4. Easier loan approval: whether you're applying for a mortgage, car loan, or personal loan, having a good credit score increases your chances of getting approved.
  5. Access to premium credit cards: many premium credit cards with attractive rewards and benefits are often reserved for individuals with good or excellent credit scores.
  6. Faster approval process: your applications for credit or loans are likely to be processed more quickly when you have a good credit score.
  7. Rental opportunities: landlords and property managers may be more inclined to approve your rental application if you have a solid credit history.
  8. Employment opportunities: some employers perform credit checks during the hiring process. A good credit score can reflect positively on your financial responsibility.
  9. Insurance premiums: insurance companies sometimes use credit scores to determine premiums. A good credit score may result in lower insurance rates.
  10. Waived security deposits: utility companies and service providers might waive security deposits for customers with good credit scores.
  11. Negotiation power: when negotiating interest rates, terms, or fees with lenders, having a strong credit score can give you leverage.
  12. Better cell phone plans: some cell phone providers offer more favorable plans and deals to customers with good credit scores.
  13. Enhanced financial flexibility: a good credit score provides you with more financial options and the ability to secure credit when needed.

It's important to note that the specific perks you receive can vary based on individual lenders, service providers, and your overall financial situation.

What you can expect with a good credit score

Maintaining a good credit score can help you enjoy these benefits and open doors to various opportunities in your financial life.

Here’s how important a good credit score is to getting approved and what terms you can reasonably expect:

FICO range: exceptional

Likelihood of approval: high chance with best terms and rates.

Terms & rates: preferred rates and terms likely.

FICO range: very good

Likelihood of approval: likely approval with favorable terms.

Terms & rates: favorable rates and terms probable.

FICO range: good

Likelihood of approval: good chance with reasonable terms.

Terms & rates: moderate rates and chances of approval.

FICO range: fair

Likelihood of approval: approval possible, terms may not be great.

Terms & rates: higher rates and limited approval chances.

FICO range: poor

Likelihood of approval: limited approval chances, higher rates.

Terms & rates: limited options and high interest rates.

Factors that influence your FICO score:

Credit scoring models use complicated algorithms that evaluate patterns in your credit report and determine how likely you are to repay your debts based on that information. These models weigh various other factors, such as payment history, credit utilization, length of credit history, and types of credit. The net result is your FICO score, a shorthand for just how creditworthy you are.

Let’s look at each component:

Payment history (35%): the record of timely payments plays the most significant role in your FICO score.

  • Pay all bills on time to maintain a positive payment history.
  • Set up reminders or automatic payments to ensure punctual payments.

Credit utilization (30%): the percentage of available the credit limit you're using. Aim to keep this below 30%.

  • Regularly monitor your credit card balances and credit limits.
  • Pay down credit card balances to keep utilization low.

Length of credit history (15%): the longer your credit accounts have been active, the higher credit scores the better.

  • Keep old accounts open to maintain a longer credit history.
  • Avoid opening too many new accounts, which could lower your average account age.

New credit (10%): this takes into account the number of recently opened accounts and the number of recent hard inquiries.

  • Be cautious when applying for new credit, as each hard inquiry can slightly impact your score.
  • Opening multiple accounts in a short period may be seen as risky behavior.

Credit mix (10%): a diversity of credit types (credit cards, mortgages, loans) can positively impact your credit score ranges.

  • Having a mix of credit types can show your ability to handle different financial responsibilities.
  • Don't open new accounts just to improve your credit mix; focus on responsible credit management.

Payment history (35%)

  • Make sure to pay your bills on time, as late payments can have a significant negative impact.
  • Set up alerts or reminders to help you remember payment due dates.

Credit utilization (30%)

  • Aim to keep your credit card balances well below their limits to maintain a low utilization rate.
  • Pay off outstanding balances as quickly as possible to reduce overall credit utilization.

Length of credit history (15%)

  • Keep older accounts open to demonstrate a longer credit history.
  • Avoid closing your oldest accounts, as this can shorten your average account age.

New credit (10%)

  • Only apply for new credit when necessary, as multiple inquiries can lower your score.
  • Be cautious about opening several new accounts in a short period.

Credit mix (10%)

  • While you don't need every type of credit, having a mix can showcase your ability to handle different credit obligations.
  • Focus on responsible credit behavior rather than seeking out specific types of credit.

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What is a good FICO score to buy a house?

Buying a house is a huge undertaking, and your credit score plays a crucial role in securing a mortgage. 

While specific lenders might have varying requirements, a good FICO score for buying a house is generally considered to be around 620 or higher. However, to ensure better terms and lower interest rates, aiming for a score above 700 is recommended. 

According to data from FICO, the average credit score for approved mortgage applications in the U.S. was 762 in 2023.

Bear in mind that there are plenty of home loans that only require fair credit, including VA Loans and FHA Loans.

What is a Good FICO Score to buy a car?

When it comes to buying a car, a good FICO score is also important for securing favorable loan terms. Generally, a FICO score of 660 or higher is often considered a good range for obtaining a car loan. However, to access better interest rates and loan offers, aiming for a score above 720 is advisable. 

According to Experian's State of the Automotive Finance Market report, the average credit score for new car loans in the first quarter of 2023 was 733, while the average score for used car loans was 654.

Extra credit: understanding the scoring models of FICO vs. VantageScore

When it comes to understanding credit scores, two prominent players in the field are FICO and VantageScore. 

Both of these credit scoring models utilize a scoring range of 300 to 850 to evaluate your creditworthiness. They analyze your credit history and payment behaviors to determine how reliable you are as a borrower. 

Although the specific algorithms used by each model are proprietary, both FICO and VantageScore take into account key factors that include payment history, credit utilization, length of credit history, types of credit, and recent credit activity.

FICO score: a trusted metric

The FICO score is a well-established and widely used credit scoring model. It's recognized by many lenders as a reliable measure of credit risk. FICO scores are calculated by considering your payment history, credit utilization (the percentage of available credit you're using), how long you've had credit accounts, the types of credit you have (credit cards, mortgages, etc.), and recent credit inquiries. FICO scores are commonly utilized by lenders when making decisions about lending, interest rates, and credit approvals.

VantageScore: a contemporary alternative

VantageScore, on the other hand, is a more recent player in the main credit bureaus' scoring arena. It was created collaboratively by the three major credit bureaus (Equifax, Experian, and TransUnion). Similar to FICO scores, VantageScores also take into account payment history, credit utilization, length of credit history, types of credit, and recent credit activity. VantageScore aims to provide a consistent credit scoring system across all three credit bureaus and is often used by creditors to assess risk.

Shared elements and key differences

Both FICO and VantageScore consider similar factors to determine your credit score, emphasizing the importance of responsible credit management. However, there are some differences in how these factors are weighted and interpreted in each model's proprietary algorithm. It's worth noting that some lenders may have a preference for using one model over the other based on their individual criteria and partnerships.

Why understanding both matters

Being aware of the differences between FICO and VantageScore is important because it gives you a more complete view of your credit health. Monitoring your credit scores from both models can help you identify trends and take action if any discrepancies arise. Additionally, since lenders have the flexibility to choose which scoring model they use, having a solid understanding of both your FICO score and VantageScore can better prepare you when you're seeking credit.


Both FICO and VantageScore offer insights into your creditworthiness by evaluating your credit history and payment behaviors. 

While they share many similarities, their proprietary algorithms and weighting systems differ.

Important statistics about credit scores: at a glance

Number of Americans with no credit history:

  • Approximately 26 million adults (one out of 10) are "credit invisible," lacking credit history.
  • Around 19 million adults lack a credit score due to minimal credit usage or outdated credit history.

The average credit score by cohort:

  • The average FICO credit score for Americans was 716 in 2021.
  • Factors contributing to this average score include fewer late payments, shrinking debt, and decreased credit utilization.

Average credit score by age group:

  • Ages 18-23: 674
  • Ages 24-39: 680
  • Ages 40-55: 699
  • Ages 56-74: 736
  • Ages 75+: 758

Average credit score by generation:

  • Generation Z: 674
  • Millennials: 680
  • Generation X: 699
  • Baby Boomers: 736
  • Silent Generation: 758

Average credit score by income:

  • $30,000 or less per year: 590
  • $30,001 to $49,999: 643
  • $50,000 to $74,999: 737

Percent of credit files that don’t qualify for a FICO score:

  • 11 percent of Americans don't qualify for a FICO credit score.

Percent of Americans who have a credit score of 800 or higher:

  • Only 22 percent of Americans have a credit score of 800 or greater.

The average FICO score increase in the last decade:

  • The average FICO score increased by approximately 24 points between 2010 and 2020.

Percent of adults who never check their scores:

  • 54 percent of adults never check their credit scores.

Percent of adults who check their score monthly:

  • Only 21 percent of respondents check their credit score on a monthly basis.

What is the highest credit score?

  • The highest possible credit score is 850.

What is considered a perfect credit score?

  • A score of 850 is considered perfect; an exceptional score falls between 800 and 850.

What is considered a poor credit score?

  • A FICO score below 580 is considered poor.

What is considered a good credit score?

  • Equifax considers scores between 670 and 739 to be good credit scores.

Percent of the U.S. population with a FICO score below 550:

  • Only 11.1 percent of the U.S. population has a FICO score between 300 and 549.

Percentage of the U.S. population with a credit score over 700:

  • Approximately 59.2 percent of the U.S. population has a credit score between 700 to 850.

Highest and lowest FICO scores by state:

  • Minnesota has the highest average FICO score of 739, while Mississippi has the lowest at 675.

Credit score needed to buy a house:

  • Conventional mortgage: 620
  • VA loan: 580
  • FHA loan with 3.5 percent down: 580
  • FHA loan with 10 percent down: 500

Credit score needed to buy a car:

  • The average credit score needed to purchase a car is 661 and above.

Note: sources cited from the following publishers:

Good FICO credit scores - frequently asked questions (FAQ)

How often should I check my FICO score?

It's advisable to check at least once a year. Many financial institutions offer free score checks for their customers.

Can I still get a loan with a 'fair' FICO score?

Yes, but you might face higher interest rates and stricter terms compared to someone with a 'good' or 'very good' score.

Does the FICO score affect employment opportunities?

Some employers check credit scores as part of the hiring process, especially for finance-related roles. However, they typically look for major red flags rather than a specific score.

What is the difference between a FICO score and a credit score?

The terms "FICO score" and "credit score" are often used interchangeably, but they can refer to slightly different things. FICO scores are a type of credit score developed by the Fair Isaac Corporation. 

On the other hand, a credit score is a numerical representation of an individual's creditworthiness. Both FICO scores and other credit scores are used by lenders and insurers to assess the risk associated with providing credit or insurance.

What is considered a good credit score?

Equifax considers credit scores between 670 and 739 to be good. This range reflects creditworthiness and increases your chances of qualifying for better lending terms and insurance rates.

Final thoughts

Understanding the ins and outs of the FICO score can be a game-changer for your financial health. Striving for a good credit score not only offers peace of mind but also provides tangible financial rewards. Trust Homebody to help you navigate your credit journey with confidence!

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