Credit scores usually range from 300 to 850. While those three digits might seem arbitrary, they matter a lot. A good credit score is important in qualifying for the best credit cards, mortgages, and competitive loan rates when required.
When you apply for a loan or credit card, lenders will review your credit report to determine your eligibility, potential credit risk, and ability to repay loans.
What Is Considered a Good Credit Score?
There are two main scoring systems – FICO and VantageScore. FICO Scores are more common, as most lenders check this.
Very poor: 300 to 579
Fair: 580 to 669
Good: 670 to 739
Very good: 740 to 799
Excellent: 800 to 850
Very poor: 300 to 499
Poor: 500 to 600
Fair: 601 to 660
Good: 661 to 780
Excellent: 781 to 850
Tips to Get a Good Score
Always make payments on time: Your payment history is the most important factor in your score, so it’s key that you always pay on time.
Always pay in full: While you should make at least your minimum payment, paying your bill in full every month brings down your credit utilization rate.
Don’t open too many accounts: Whenever you apply for credit, an inquiry appears on your credit report. This dings your credit score about five points, although it bounces back within a few months. Try to limit applications and look around with prequalification tools that don’t hurt your score.
How a Good Score Helps
Having a good credit score helps you receive better-than-average APRs from lenders and increases approval odds for your credit. With a good credit rating, you will have better chances of qualifying for a mortgage, lease, or car loan when required.
Many of the best credit cards also require applicants to have good or excellent credit. If you would like to benefit from competitive rewards, annual statement credits, balance transfers, and more, you’ll need to have at least a good credit score. But keep in mind that even if your credit score falls within the good range, there is no guarantee you’ll be approved for a great credit card since card issuers look at more factors than just your credit score, such as income and total debts, etc.