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What is a Good Credit Score?

by | Aug 31, 2022 | Credit

What is a good credit score?
If you’re like most folks, you want to have the absolute best credit score possible. Your credit score dictates so many different aspects of your financial life that it can be one of the single most important things you can focus on. But you might be asking yourself…

What is a Good Credit Score, Anyway?

To understand what a good credit score is, we first need to answer the question: What is a credit score, anyway?

The short answer is that a credit score is a three-digit number ranging from 300 to 850. They are calculated from the information contained in your credit report and include things like your payment history, the amount of debt you have, and the age of your credit history.

What constitutes a “good” credit score can vary slightly from lender to lender, as they all have different criteria when it comes to granting credit. Want to know what your credit score is currently? Click here to find out right now.

How Potential Lenders Use Credit

Potential Creditors and Lenders, such as credit card companies, banks, or car dealerships use credit scores to determine whether or not to offer your credit. It is one of the main factors that helps them decide how likely you will be to pay back the money that they are lending you. There are many different scoring models that calculate credit scores, a few of which we will touch on later.

The higher your credit score is, the more that shows potential lenders that you have established a pattern of responsible credit behavior. This gives creditors more confidence when evaluating your credit request. 

The lower your credit score is, however, the riskier those same lenders may view the prospect of entering into an agreement with you.

How a Credit Score is Generated

A credit score is generated when a credit rating company’s algorithm is applied to a potential borrower’s credit report.

This process begins with current creditors reporting your interactions to the three major credit bureaus (Equifax, Experian, and TransUnion) on a monthly basis. While many creditors do report to all three, it is important to note that not you could have an account with a lender that reports to only one or two of them (or none at all). These interactions affect what entries show up on your credit report any time someone views it.

When a potential lender checks your credit report, they utilize one of many different scoring models that are available to generate a credit score. This number is derived by applying the algorithm of a particular credit rating company (such as VantageScore® or FICO®) to your credit report. Keep in mind that there are many different scoring models out there, and they all differ depending on the type of loan being sought and that individual lenders’ preference for certain criteria.

FICO® versus VantageScore®

Most credit rating companies use five main factors that each have a varying level of impact on the overall score. We will touch on how two of the most frequently used companies (FICO® and VantageScore®) weigh those factors and how they rate different credit scores.


What follows is how impactful they are with FICO Classic Credit Score®:

  • Payment History (35%)
  • Amounts Owed (30%)
  • Length of Credit History (15%)
  • Credit Mix (10%)
  • New Credit (10%)

FICO® Scores range from 300 to 850. It defines a “good” score as being between 670 to 739. FICO® also offers industry-specific credit scores (such as for auto lenders or credit card companies) and those scores have a different range – usually from 250 to 900. However, the “good” range even for industry-specific credit scores still falls between 670 to 739.


What follows is how influential similar factors are when determining a credit score, but this could also depend on your unique credit report:

  • Total Credit Usage, Balance, and Available Credit (Extremely influential)
  • Credit Mix and Experience (Highly influential)
  • Payment History (Moderately influential)
  • Age of Credit History (Less influential)
  • New Accounts Opened (Less influential)

Initially, VantageScore® used an entirely different numerical scale (one that ranged from 501 to 990). However, the two most recent versions (VantageScore® 3.0 and 4.0) have adopted the same scale that FICO® uses. Currently, VantageScore® defines a “good” credit score as being between 661 and 780.

If you have a bad credit score and you would like help in repairing it, then click here to see what our affiliates can offer you.

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