What Is A Good Credit Score?

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what is a good credit score

Everyone knows credit scores are important, but what is a good credit score anyway? There’s often a lot of confusion around this topic. For starters, different credit agencies have different score systems. Most operate on a range from 350 to 850, but even then, very few people truly have a perfect score. 

We’re here to clear up information on what is a good credit score. We’ll also go over exactly how your credit score is calculated across different credit bureaus, share some tips on what you can do to boost your numbers, and much more right below!

Good scores by credit bureau 

Your credit score is a three-digit number based on information collected by the three major credit bureaus: Equifax, TransUnion, and Experian. Credit bureaus are agencies that collect, update, and store information about your credit history. 

As a general rule, a “good” credit score is anything above 670, and an average score is around 704. However, each bureau’s definition of a “good” score varies slightly. 

Whenever you apply for a loan, mortgage, or a place to live, lenders and landlords will use your credit score to judge your application. It tells them how trustworthy you are with debt and whether they can expect you to make on-time payments consistently. 

Having a good credit score can help you access a wider variety of affordable lending solutions, while a bad credit score may prevent you from obtaining financing altogether. Credit card companies, banks, lenders, and other creditors report your payment and debt activity to the three credit bureaus, which in turn keep a record. 

This is known as your credit report, and it contributes to your credit score calculation. Every credit reporting bureau has its own method of calculating your credit score, so you might notice a difference in your credit scores across the three reports.

Understanding your FICO credit score 

Have you ever heard of the term “FICO score”? If not, no worries. We’ll demystify it here. To start, it helps to know that the Fair Isaac Company (FICO) isn’t a credit reporting bureau itself.

Instead, it’s the largest and most well-known company that uses your credit data to assign you a credit score. FICO credit scores are used in over 90% of lending decisions in the United States. FICO scores range from 300 to 850 points.

Factors used to calculate your FICO score 

To calculate your score, FICO analyzes several factors related to how you use credit.

Payment history

Do you pay your bills by the payment date every month? Or do you often miss your minimums? Your payment history is the most important factor when it comes to calculating your FICO score. It accounts for a whopping 35% of your FICO credit score. 

Credit utilization

The term “credit utilization” refers to how often you use the credit that lenders extend to you. It’s based on the amount you spend against your credit limit. If you max out your cards every month, chances are that you will have a high utilization rate. 

Too much debt will drive up your credit utilization rate and ultimately bring down your score. People with the best credit scores have credit utilization rates that are less than 10%. Your credit utilization accounts for 30% of your FICO score.

Length of credit history

The length of your credit history refers to how long each line of credit you have has been open. The longer your credit history, the more of a reliable borrower you are. The length of your credit history accounts for 15% of your FICO score.

Recent activity

Your recent activity includes anything you’ve done on your credit report in the last three to six months. From applying for new lines of credit to paying off accounts, credit score calculators put more weight on your most recent credit activity. Your recent activity makes up about 10% of your FICO score.

Keep in mind that applying for new lines of credit can bring down your score slightly in the short run. Make sure to refrain from applying for multiple accounts, especially if you are planning to make a major purchase in the near future. 

Credit mix

Your credit mix refers to the types of credit that you have on your credit report. From installment loans to credit cards, lenders like to see multiple types of credit on your report. Your credit mix makes up about 10% of your FICO score.  

Understanding your VantageScore credit score

VantageScore is FICO’s main competitor. The VantageScore model is the product of a partnership between the three major credit reporting bureaus which we’ll explain in more detail below. VantageScore ranges between 300 and 850.

Factors used to calculate your VantageScore

Like FICO, VantageScore takes a few of your personal factors into consideration, though it does this in slightly different ways.

Payment history

Like the FICO model, your payment history is the most important factor that influences your credit score. Your payment history makes up 40% of your VantageScore credit score.

Age and type of credit 

The VantageScore model puts more weight on the length of your accounts and the mix of credit types that you have available. Both the age of your credit and the type of credit you have collectively influence 21% of your VantageScore credit score.

Credit utilization

The VantageScore model places less importance on your credit utilization than your FICO score. Credit utilization makes up 20% of your VantageScore credit score.

Total balances

The VantageScore model takes into account how much you owe across your accounts. Your total balances make up 11% of your VantageScore credit score.

Recent behavior

Like your FICO score, your VantageScore puts additional importance on your recent credit behavior. Your recent behavior makes up 5% of your VantageScore credit score.

Available credit

How much credit do you currently have available? Your current available credit makes up about 3% of your VantageScore credit score.  

Understanding the three major credit reporting agencies

To get a better understanding of VantageScore, let’s take a look at the three reporting agencies that came together to create it.


Equifax is a credit reporting bureau that issues credit reports and scores. Your Equifax score comes from the items on your Equifax credit report. Equifax uses the FICO scoring model, so its scores range from over 800, or exceptional, to less than 580, or poor.

  • Poor: Less than 580 points. If you have a poor credit score, you’re well below the national average. A poor credit score tells lenders that you’re a very risky borrower.
  • Fair: Between 580 and 669 points. A fair credit score is below average. Many lenders will approve loans with a fair score, but you might have to pay higher interest rates.
  • Good: Between 670 and 739. Most people have a credit score that falls in the good range. You can usually expect access to good interest rates and more loan options.
  • Very good: Between 740 and 799. Scores in the very good range are above the national average. A very good credit score tells lenders that you’re a reliable borrower. You can usually expect access to better interest rates and more loan options.
  • Exceptional: Over 800. Exceptional scores tell banks and other lenders that you’re an ideal borrower. If you have an exceptional credit score, you’ll have access to some of the best rates available and it’ll be easy for you to get a loan. 

Your Equifax credit score might be different from your Experian or TransUnion score because the latter bureaus use the VantageScore model. 


Experian is a credit reporting bureau that issues credit reports and scores. Your Experian credit score reflects the information on your Experian credit report. Experian uses the VantageScore model, and score tiers are as follows:

  • Very poor: Between 300 and 499. If you have a credit score in the very poor range, you’re unlikely to be approved for a loan or credit line. Only 5% of people fall into the very poor category.
  • Poor: Between 500 and 600. If you have a credit score in the poor range, you might find some success when you apply for loans. However, you might have higher interest rates or require a larger down payment.
  • Fair: Between 601 and 660. If you have a credit score in the fair range, you’ll probably be approved for many loans. However, you won’t have access to the best rates or terms.
  • Good: Between 661 and 780. About 38% of consumers fall into the good credit score range. If you have a good credit score, you’ll be approved for most loans at competitive rates.
  • Excellent: 781 and above. If you have a credit score in the excellent range, you’ll have access to the most loan options and the lowest interest rates. 


TransUnion is a credit reporting bureau that uses the VantageScore model. TransUnion scores are unique because instead of using a very-poor-to-excellent scale, it assigns scores based on an F to A grading system. TransUnion’s VantageScore ranges are as follows:

  • F: Between 300 and 600
  • D: Between 601 and 657
  • C: Between 658 and 719
  • B: Between 720 and 780
  • A: Between 781 and 850

How to boost your credit score

It’s a good idea to know all of your credit scores and compare them. Knowing all of your scores will help you create the best plan possible to raise your score. 

Step 1: Determine your goals

Why do you want to raise your credit score? Do you want to buy a home or get approved for a new credit card? Determine your goals and consult with banks or lenders to learn more about specific credit requirements.

Step 2: Monitor your score 

Did you know that you don’t need to subscribe to an expensive service or pay money to access your credit score? It’s true! MoneyLion’s app offers free credit monitoring tools to members. You can monitor your credit score, payment history, age of credit, credit utilization rate, credit inquiries, loans, debt, and more.

It also charts out your history of credit score changes. You’ll receive access to a credit simulator feature that lets you test out how actions such as opening a new credit card, paying off debt, or taking out a new loan might affect your credit score. 

Step 3: Review your credit report 

Your credit reports include information regarding your credit history. Credit accounts, missed payments, current loans you have open, inquiries, and bankruptcies will all appear on your credit reports. Not every creditor reports to all three credit bureaus, so each of your credit reports may be a bit different. 

The Fair Credit Reporting Act allows you to request a free pull of your credit report from each of the three major credit reporting bureaus once every 12 months. You can get your free report here

Step 4: Compare your scores 

Take a look at all of your credit reports and compare them. Did you know that about 20% of Americans have an error on their credit reports which lowers their scores? 

For example, certain information could be missing from your report or a creditor might report someone else’s credit history. In other words, another person’s delinquent mortgage payments could be mixed with yours because he or she has the same name as you. If you do find an error on your report, address it as soon as possible. 

Step 5: Make a game plan

Go ahead and move toward your financial goals if your credit scores look good. But if your scores are low, it’s a smart idea to take some steps to improve your credit before you apply for a mortgage or a new credit card.

Some steps you can take to boost your score include:

  • Take out another line of credit– You might assume that you shouldn’t apply for any new lines of credit when you’re trying to raise your score. However, increasing your overall credit line can lower your utilization rate, thereby increasing your score. MoneyLion offers Credit Builder loans that can potentially help you raise your score over time, and you don’t need good credit to borrow.
  • Resolve discrepancies- From reporting paid-off loans as open to bankruptcies that aren’t yours, errors might pop up on your credit report. Report any errors to the appropriate credit reporting bureau.
  • Pay down debt– Making regular payments on your loans shows that you’re a responsible borrower. Pay down your debt and watch your credit score rise!
  • Make on-time payments– Making on-time payments on your loans and credit cards is the most important factor in maintaining a good credit score. Having a difficult time meeting multiple monthly expenses? Try signing up for automatic bill pay to have your minimum payments withdrawn by the payment date.
  • Monitor your credit– Keep track of your score over time to see the progress you’re making and catch identity theft early. If you have an account with MoneyLion, you can take advantage of MoneyLion’s credit-monitoring and credit-building features. 

How to build a great credit score 

Your credit score plays a major role in getting a loan, being approved for a mortgage, and saving money on interest rates. Want to raise your credit score? Check out MoneyLion’s Credit Builder Plus membership. 

It’s the smart way to build your credit. You can access up to $1,000 in funds at an affordable interest rate all without a credit check. More than half our members raised their score by up to 27 points within 60 days!
What are you waiting for? Create an account with MoneyLion today and get started on the path to building a great credit score!

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