What Is a Good Credit Score?

What we’ll cover:

• A FICO score between 670 and 739 will typically unlock the benefits of having a good credit score  
• Good credit score benefits: lower interest rates, better credit approval rates, more credit card rewards
• Strengthen your payment history by paying bills on time, in full

What is a good credit score? It’s a smart question to ask. Your credit score has the power to affect your life in many ways.

The higher your score, the more likely you are to qualify for the loans and credit cards you want – you know, the ones with lower interest rates. That’s because you’ll typically pay less in interest when your credit score looks attractive to lenders, which is a benefit that could potentially save you thousands of dollars over the lifetime of a mortgage or car loan.

Where else can a strong credit score help you save? Insurance premiums (in most states), utilities and cell phone plans, too.

Think of ‘good’ as a range rather than a number

Rather than asking what is a good credit score number, it’s more helpful to understand the range of good credit scores. 

The most widely used credit scoring system, FICO, operates on a scale from 300 to 850, and break this scale into slightly different classifications from “Poor” all the way up to “Excellent". A FICO Score has both a Good and Very Good credit score rating. 

Generally speaking, a Good or Very Good FICO score falls between 670 and 799. However, it’s important to remember these are just guidelines to keep in mind. Individual lenders may have their own standards of what is considered a good credit score.

The benefits of having a good credit score

Having a good credit score may help you become approved for new lines of credit and lower interest rates. Say you’re applying for a $250,000, 30-year fixed mortgage. Here’s how your FICO credit score could make a difference:

• 660 – 679: You could pay $187,126 in total interest at a rate of 4.143% APR  
• 680 – 699: You could pay $175,998 in total interest at a rate of 3.929% APR
• 700 – 759: You could pay $166,906 in total interest at a rate of 3.752% APR

Small changes can really add up to a big difference, right? 

Your good credit score can also help you qualify for credit cards with rewards like sign-up bonuses, cash back, travel points, low interest rates and zero-percent APR introductory offers. 

Your credit score makes a financial difference in other ways, too. Say you move into a new apartment and call the local utility company to set up service. Utility companies may check your credit score during registration, then use it to determine whether or not you need to pay a security deposit. 

Insurance carriers may also consider your credit scores when they are setting the prices for homeowners and auto insurance premiums. Why? Credit histories have proven to correlate with risk levels; a higher score tells insurers you’re less likely to experience an incident and file a claim.

How to get a good credit score

Everyone stands to benefit from improving their credit score, whether you’re trying to get into the Good range or take your score from Good to Excellent.

Here are a few ways to help boost your credit rating:

• Strengthen your payment history by paying bills on time, in full.
• Utilize less than 30 percent of your available credit on all cards, although less than 10 percent is ideal.
• Apply for new lines of credit selectively; applications can trigger a hard inquiry that lowers your score for six months to a year.
• Monitor your credit score carefully and check for errors. You can get a copy of your credit report for free  each year at AnnualCreditReport.com.

Optimizing your financial habits now can help you build your score over time.

Knowing what is a good credit score – and why it’s worthwhile to have one – can motivate you to keep track of your score and manage your credit well. It can be rewarding to see your score grow as the months pass.