Your credit score is one of the most important factors impacting your financial life. It determines the interest rates and terms you’ll be offered for loans, credit cards, mortgages, insurance premiums, apartment rentals, and more. So where does your credit score need to be to unlock the best options and rates? What is considered a decent or good credit score by today’s standards?

In this comprehensive guide, we’ll explore the different credit score ranges, explain what qualifies as a good credit score versus just average, and summarize key takeaways on building and maintaining good credit.

Overview of Credit Score Ranges

To start, it helps to understand the overall landscape of credit scores. The FICO and VantageScore models used by the three major credit bureaus (Experian, Equifax and TransUnion) grade credit on a scale from 300 points to 850 points. The higher the score, the lower the perceived credit risk.

While specific scoring algorithms differ slightly, most lenders view credit scores within the following general ranges:

  • Very Poor: 300-549
  • Poor: 550-649
  • Fair: 650-699
  • Good: 700-749
  • Very Good: 750-799
  • Excellent: 800-850

So where along this spectrum of credit scores does a consumer cross over from having not-so-great credit to decent or good credit? Let’s explore each range in more detail.

Very Poor Credit (300-549)

Scores in the very poor range reveal major derogatory marks, limited credit history, or both. Typical credit report red flags include bankruptcies, foreclosures, collections, late payments, excessive debt levels, and minimal open accounts.

With very poor credit, consumers will face challenges getting approved for loans or credit cards. And if approved, it will likely involve subprime terms with extremely high interest rates or fees. Very poor scores signal the need for credit repair and rehabilitating credit over time through on-time payments. But the good news is that scores can improve relatively quickly once the right financial habits are established.

Poor Credit (550-649)

A poor credit score indicates high risk to lenders based on ongoing missed payments, collections, or high balances. Those with poor credit may still get approved for basic credit cards and loans but should expect high APRs, low limits, and additional fees. Extra steps like paying upfront deposits or adding a cosigner may be required for approval in some cases.

Poor credit scores mean there is still work to do in getting credit issues under control. But transitioning into the fair range is feasible within a couple years by consistently paying bills on time, keeping credit card balances low, and avoiding new missed payments. Ongoing financial education can also provide the knowledge needed to start making positive changes.

Fair Credit (650-699)

Fair credit is a mixed bag, with scores at the higher end demonstrating good financial behaviors beyond past mistakes. Scores from 650-679 are still considered subprime but show progress towards prime credit standing. Those with fair credit may qualify for standard credit cards and loans but pay slightly higher than average interest rates in most cases.

Once scores climb above 680, improved credit terms start opening up. Most lenders view fair credit consumers as an acceptable risk with appropriate product terms. As positive habits continue, it is realistic to reach good credit standing within a year or two. The key is avoiding setbacks along the way through smart credit management.

What Is Considered a Good Credit Score?

Good Credit (700-749)

Experts widely consider credit scores of 700 and above to be in the good range. This milestone signals to lenders that consumers have built solid credit management practices over time. Good credit unlocks access to competitive interest rates and flexible terms for mortgages, auto loans, credit cards and other lending products.

While not flawless, good credit scores demonstrate that financial fundamentals are sound. Consumers have shown the ability to handle debt responsibly. As long as this pattern continues, climbing towards very good or excellent credit is achievable. But for most lending purposes, achieving good credit provides access to the best conventional rates and terms.

Very Good Credit (750-799)

Reaching very good credit standing with scores of 750 or higher demonstrates consistently strong money management and credit usage over many years. Lengthy credit histories, diverse account types, and excellent payment records are all hallmarks of very good scores.

With minimal negatives and a proven willingness to take on credit smartly, consumers are rewarded with prime to super-prime offers. Expect easy approvals, low rates, high borrowing limits, and flexible terms on all manner of credit products and loans in the very good credit category. Maintaining prudent habits makes climbing to excellent readily achievable.

Excellent Credit (800-850)

Excellent credit is the gold standard, reflecting the lowest perceived risk and highest creditworthiness. Scores of 800 or higher mark the most prized borrowers who lenders compete aggressively for. In addition to flawless payment histories, these consumers have built extensive and diverse credit profiles over many years.

The benefits of excellent credit include ultra-low interest rates, high limits, flexible terms, and instant approvals. Excellent scores also provide a buffer if a credit stumble ever occurs down the road. Overall, maintaining excellent credit requires minimal effort beyond smart ongoing money management. But the competitive edge it provides is undeniable.

What Credit Score Is Considered Good Enough?

Based on conventional lending standards, a credit score within the good range of 700-749 is considered decent or good enough for most consumer credit needs. While aiming higher is ideal, crossing the 700 threshold unlocks access to the most competitive interest rates and flexible approval terms in the mainstream credit marketplace.

Here are some key facts supporting 700 as the widely accepted standard for good credit:

  • Credit products marketed to “prime” borrowers typically require good credit minimum. Subprime products are offered to those below.
  • Interest rates on credit cards, auto loans and mortgages drop at the 700 credit score mark as lenders apply their prime pricing tiers.
  • Most landlords require a minimum credit score around 700 for apartment rental applications.
  • Insurance companies use 700 as a cutoff for their best policy rates in many cases.
  • Credit monitoring services define good credit as 700+, fair as 600-699, and poor as below 600.

While every lender has its own standards, scoring 700 clearly represents crossing into good credit territory. But climbing higher within the good range is beneficial. Scores above 720 or 740 are seen as very strong, and may qualify for the most competitive published rates. Reaching very good or excellent credit brings bragging rights, but good credit is accepted by most as quite sufficient for everyday needs.

How to Reach and Maintain Good Credit

Building and keeping a credit score of 700 or higher is attainable for most people willing to make smart financial choices over time. Here are some best practices for reaching and staying in the good credit category:

  • Always pay bills on time. Payment history is the biggest factor in credit scores. Set up autopay or reminders to avoid missed payments.
  • Keep credit card balances low. High balances hurt scores. Keep individual cards below 30% of their limit and pay in full each month if possible.
  • Monitor credit reports. Verify all information and dispute errors immediately to protect scores.
  • Limit credit inquiries. Each application causes a slight temporary hit to scores, so only apply for what is truly needed.
  • Have credit diversity. Mix of credit cards, loans, and mortgage creates a well-rounded credit profile over time.
  • Don’t close old accounts. Having long average account age improves scores, so keep old cards open unless absolutely necessary.

With some diligence, perseverance, and good habits, achieving and maintaining a credit score of 700 or above is within reach for most consumers. Get started now building your good credit foundation.

Credit Score FAQs

Below are answers to some frequently asked questions about credit scores:

How is a good credit score determined?

Credit scores are calculated based on your payment history, amounts owed, credit history length, new credit, and credit mix using complex statistical models. Scores of 700-749 are considered good because they indicate responsible credit management.

What is the average credit score?

The average FICO credit score in the U.S. is 716 as of 2022, which falls within the good credit range. Average VantageScore is 696, also in good territory. so most people have decent credit on average currently.

How long does it take to build good credit?

Building a good 700+ credit score typically takes around 6 to 12 months of consistent on-time payments, low balances, and avoiding new credit applications. Those with poor scores may need up to 2 years to cross into good standing.

Can I have good credit with late payments?

One or two 30-day late payments will still allow for good credit scores. But multiple recent late payments, or those 60+ days past due, are signs of risk that make good credit much harder to achieve until improved.

What is the fastest way to increase credit score?

Paying down balances well below 30% of their credit limits and resolving collection accounts by paying or disputing them will produce the quicWhat is the fastest way to increase credit score?

Paying down balances well below 30% of their credit limits and resolving collection accounts by paying or disputing them will produce the quickest score improvements. Avoiding new applications and not cancelling old accounts also helps increase scores quickly.

Does checking your credit lower your score?

Checking your own credit scores or reports does not lower your scores. Only credit inquiries from applications for new credit may temporarily impact scores. Monitoring your credit will not hurt your scores.

Does paying off all debt increase credit score?

Paying all revolving debt like credit cards can help your credit utilization ratio and therefore raise your scores. But paying off installment loans doesn’t have the same impact. Keeping some manageable revolving accounts open is ideal for strong credit mix.

What credit score is needed to buy a house?

Most mortgage lenders want to see a minimum credit score of 620-640 for FHA loans, and 680+ for conventional loans. But scores of 720+ qualify for the very best mortgage interest rates. The higher the better when applying for a home loan.

How long does negative information stay on my credit report?

Most negative credit information like late payments stays on your credit report for up to 7 years, while bankruptcies may stay on for up to 10 years before dropping off. Disputing inaccurate information can get it removed sooner.

Key Takeaways

  • Credit scores of 700 or higher are considered good by conventional standards, offering access to prime rates.
  • Very poor credit is below 550, poor is 550-649, and fair is 650-699, indicating higher risk.
  • Reaching good credit takes approximately 6-12 months of smart money management habits.
  • Scores above 750 are very good, while 800+ is excellent, but good is often good enough.
  • Maintaining good credit mainly involves consistent on-time payments, low balances, and credit diversity over time.
  • Regularly checking scores and monitoring credit reports is important to protect and improve your standing.

Knowing your credit score and working to reach good 700+ standing can have huge financial benefits. Use the guidance in this guide to build a healthy credit profile.

Samuel Mitchell