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What is a Good Credit Score in 2024

A credit score is a number based on the statistical analysis of a consumer's credit reports, usually between 300 and 850.

A credit score is a number based on several different pieces of credit data in your credit report.

Credit scores give lenders a measurement of your credit risk. Essentially credit scores predict how likely you are to default.

There are many different credit scores but FICO® Scores are the scores used by 90% of top lenders to determine your credit risk.

You have FICO® Scores for each of the 3 major credit bureaus ⏤ Experian, Equifax, and Transunion. Base FICO Scores range from 300-850, and industry-specific FICO Scores range from 250-900. The higher your FICO® Scores the more likely you’ll qualify for better rates from lenders.

What is a Good Credit Score

A good credit score ranges from 670 – 739 with most lenders and banks. Credit scores in this range signals borrowers will likely make on-time payments.

According to FICO, the average consumer FICO score in the United States as of April 2023 is 718. A FICO score of 718 is considered good.

However, particular lenders may consider different credit score ranges as a good FICO score. For instance, an auto lender may offer low-interest rates to people with FICO scores starting at 680 and above. But a bank may offer the lowest interest rate for a personal loan or credit card to customers with credit scores 720 or above.

Each lender sets its own criteria for granting the best interest rates. The higher a credit score, the more likely a consumer will be approved for credit and the interest rates will be lower.

Why FICO Scores are important

FICO Scores help lenders predict if you will pay on time, they are a fast measurement of your credit risk. FICO Scores have become a global standard for measuring credit risk in the banking, mortgage, credit card, auto, and retail industries. Don’t be the last to know what is a good credit score.

Sites like Credit Karma or Credit Sesame offer free credit scores but they are not your actual FICO Credit Scores. MyFico.com and Experian offer the actual FICO scores lenders pull.

Credit scores are also used by cell phone providers, utility companies, cable providers, landlords, employers, and some banks when you open an account.

(More: How to get a credit score of 800)

FICO Score Breakdown: Your score may be better than you think

The FICO credit scoring model places credit scores into five categories:

Exceptional Credit: Credit Score between 800 – 850

Practically automatic approval along with the lowest rates on whatever you apply for including mortgage loans, automobile loans, credit cards, and even lower insurance rates. Your credit history is pristine with no record of late payments, collection accounts, judgment, bankruptcies, or liens. You are considered an A+ borrower and the banks and lenders compete for your business.

Very Good: Credit Score between 740 – 799

You have an excellent chance of being approved for credit with great interest rates just like the 800 and above credit score. The only exception from an A+ borrower is that you may have a higher debt-to-income ratio which keeps your scores below 800. But in the eyes of banks and lenders, you are a prized possession just like the A+ consumer.

Good Credit: Credit Score between 670 – 739

Even though this is a very good credit score and you should be able to qualify for most loans, there will be some lenders that may turn you down or offer you credit at higher interest rates. There may be a few late payments in the past that are affecting your credit score. There may even be a collection account reported which can affect your credit score. But for the most part banks and lenders will have no issues in granting you credit.

Fair Credit: Credit Score between 580 – 669

Most lenders will approve you for automobile, personal loans, and credit cards but it may be challenging to get a mortgage loan unless you have a good down-payment and job stability. With a middle-of-the-road score range such as this, it would be a good idea to get your credit scores, analyze them and determine what you can do to make them higher.

You may need to tackle late payments, charge-offs, and collection accounts on your credit history by engaging in the dispute process. If you are able to get any negative items removed your credit score will improve. Reducing credit card debt and maintaining an on-time payment record for at least 6 consecutive months will also improve your credit scores.

Poor Credit: Credit Score between 300 – 579

Lenders will deal with you with extreme caution. Any credit you are able to obtain will definitely come with higher interest rates; and, if you are purchasing an automobile, a down payment may be required. There may be multiple credit issues in the past involving late payments, charge-offs, and collection accounts.

There may even be bankruptcy in your credit history. Repairing your credit should be the focus in addition to adding positive credit to show you can manage credit.

With FICO scores in the 300 to 579 range, some lenders, and even some credit card companies will be reluctant to grant you credit and your options may be limited.

Your credit options will likely be limited to subprime credit products. But all is not lost on subprime products, many of them can help build credit by reporting monthly payments to the 3 major credit bureaus like the a secured credit card. Credit repair, debt management, and rebuilding credit will be your main focus.

It’s important to take immediate action in order to repair your credit. Whatever you have done in the past with credit — do the exact opposite to turn things around. You can also build credit without using credit cards and incurring debt. Even better, build credit with a debit card with everyday purchases reporting positive information to the credit bureaus.

Unemployed consumers with credit scores in this range may even find it difficult to obtain a job as many employers pull credit reports in making hiring decisions. In addition to fixing your credit, you must rebuild credit in order to show you can manage credit and debt.

Poor credit scores in this range may benefit from a professional law firm repairing their credit such as Lexington Law Credit Repair, they have experience in removing everything from charge-offs and bankruptcies to late payments and collection accounts from credit reports; and, they have affordable monthly payment plans.

But even consumers with serious credit issues are not confined to bad credit for life. Late payments, charge-offs and collection accounts can only remain on your credit report for 7.5 years while bankruptcies and public records can only remain 10 years. Credit repair may alleviate these time periods.

What determines your credit score

While credit scoring companies such as Fair Isaac Corporation (FICO) will not reveal exactly how credit scores are computed, there are five major factors that measure the computation process. No one piece of information by itself determines your score.

Payment History (35% of your score)

  • Information from lenders, banks, credit card issuers, department store accounts, car loans, finance companies, mortgages, etc., about how timely you make payments.
  • Accounts in collection or past due.
  • Information in public records, such as bankruptcy, judgments, liens, wage garnishments, or child support orders.
  • Basically how timely you pay your bills, especially recent information is heavily weighted.

Amount of Debt Owed (30% of your score)

  • How much you owe on all your accounts.
  • How much credit you have available to use.
  • As a rule, you should only use 30% of your available credit.
  • If you need to raise your scores quickly try paying down your balances to 30% of your available credit limit. The good thing about paying down your credit account to increase your scores is that it works whether the account balance is $5000 or $500.

Length of Credit History (15% of your score)

  • How long ago you opened and used your accounts.
  • How recently you applied for new credit.
  • Recent good credit history following past payment problems.
  • Never close old accounts. Closing old accounts will deduct from your “length of credit history” and lenders always look at how long you have utilized credit. The older the credit account, the better the score.

Types of Credit (10% of your score)

  • The different types of credit accounts you have.
  • The total number of accounts you have.
  • Your mix of credit should include a mortgage, unsecured credit, and revolving credit.

New Credit (10% of your score)

  • Limit the number of credit applications you filled out.
  • Applying for lots of credit will bring your score down. Lenders may interpret your applying for lots of credit as a sign that you are experiencing financial difficulties.

All of these factors determine your credit score. Points are awarded or deducted for each factor. A score of 720 is a good goal to set if you are rebuilding your credit.

Give your credit scores an instant boost

Until recently, utility payments, cell phones, rent, and other nontraditional credit items would not be part of your credit history. But now you can get credit for bills like your phone, utilities, and popular streaming services like Netflix with Experian Boost™.

The free service allows you to include your on-time payments for utility and phone bills to calculate your credit scores. Experian says the average score increase is 13 points per user, and you get to omit any late utility and phone payments.


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