What is a good credit score? A comprehensive guide

What is a credit score? 

A credit score is a numerical representation of your creditworthiness. It’s a prediction of how likely you are to repay loans based on your past financial behavior, such as your payment history and outstanding debt. Lenders, landlords, and sometimes employers check a person’s credit score to assess the financial risk, that’s why most adults have — and need — a credit score.

In the US, a good credit score is typically considered to fall within the range of 670 to 780. Having your credit score within this range may help you get better terms on various financial agreements. 

Why is a good credit score important?

A good credit score plays a major role in your financial life. It influences your ability to get loans, secure lower interest rates, and even rent a home. Lenders, landlords, and insurers all use your credit score to assess your financial reliability. The higher your score, the better deals you’ll be able to access.

• Lower interest rates. A higher credit score can qualify you for loans and credit cards with lower interest rates.
• Better chances of your loan getting approved. With a strong credit score, you’re more likely to be approved for mortgages, auto loans, and personal loans. ​
• Smaller deposits. Landlords and utility companies may require smaller or no security deposits if you have a good credit score. ​
• Better employment opportunities. Some employers check credit scores during the hiring process, particularly for roles with financial responsibilities. The higher your score, the better your chances of landing that dream job.

If you don’t have a credit score yet, consider starting by getting a credit card and using it responsibly — paying off the balance in full each month. This approach will help you build a positive credit history over time, opening doors to better financial opportunities.​

Types of credit scoring systems 

Different credit scoring systems are used around the world, but in the U.S., the two dominant credit scoring models are the FICO Score (created by Fair Isaac Corporation) and VantageScore (developed by the three major credit bureaus: Experian, Equifax, and TransUnion). In addition to VantageScore, each of these bureaus — Experian, Equifax, and TransUnion — provides its own credit score based on the data they collect. The credit score ranges of each credit bureau are also slightly different.

Most credit scoring models, including VantageScore and FICO, take into account factors like payment history, credit utilization, types of credit used, and recent inquiries, but they may weigh these factors differently. Different industries also prioritize specific factors — auto lenders, for example, may focus on a consumer’s history with car loans or current vehicle-related debt.

Creditors, such as banks and lenders, have the flexibility to choose which scoring model to use based on their needs, industry practices, or specific lending contexts. For instance, FICO scores are often preferred for mortgages and auto loans due to their long history and widespread adoption, while VantageScore might be used by lenders seeking a broader picture of a consumer’s credit profile. As a result, you may receive different credit scores depending on the model a creditor chooses to apply.

FICO Score

A FICO score is a three-digit number that represents your creditworthiness, calculated based on your credit history. It ranges from 300 to 850, with higher scores indicating better credit health. The score is calculated using factors like payment history, amounts owed, length of credit history, new credit, and types of credit used. Lenders use your FICO score to decide whether to approve loans or credit applications and what interest rates to offer.

• Range: 300–850
• Factors it considers: Payment history, credit utilization, length of credit history, types of credit, and new credit
• Industries and use cases: Mortgages, auto loans, credit cards, and personal loans

VantageScore 3.0/4.0

VantageScore is a credit scoring model that also ranges from 300 to 850, similar to the FICO score. It evaluates creditworthiness using factors like payment history, credit utilization, and recent credit inquiries. While both VantageScore and FICO use similar criteria, VantageScore places more weight on recent credit activity and total balances. It’s gaining popularity fast, especially for newer credit products. Lenders may choose either model depending on their specific needs.

• Range: 300–850
• Factors it considers: Payment history, credit utilization, total balances, recent credit inquiries, and credit mix
• Industries and use cases: Credit cards, personal loans, and some auto lenders

Other credit scoring systems

In addition to FICO and VantageScore, other credit scoring systems include:

• TransUnion Credit Score, which is based on data from TransUnion’s credit reports. It uses a similar model to FICO, focusing on factors like payment history and credit utilization.
• Experian Credit Score comes from Experian’s own data and calculates a score within a range of 330 to 830. Some lenders use it to assess the risk of personal loans and credit cards.
• Equifax Credit Score also uses data from Equifax’s reports. It ranges from 280 to 850 and is another option for assessing creditworthiness, though less common than FICO or VantageScore.
• LexisNexis Risk Solutions provides a specialized credit score that often focuses on risk assessment for insurance and tenant screening rather than traditional lending. It incorporates both credit data and other factors like public records.

These systems offer alternative ways to assess credit but have a more limited presence in the mainstream lending market.

What is considered a good credit score across different systems?  

A good credit score reflects responsible credit management and helps you secure better loan terms and lower interest rates. Different scoring systems have slightly varying ranges for what is considered “good.” Let’s explore the different ranges.

Good FICO score range  

A good FICO score falls within the range of 670 to 739. Scores within this range indicate responsible credit management and generally qualify for favorable loan terms, while higher scores can lead to even better rates and offers from lenders.

• 300-579 (Poor)
• 580-669 (Fair)
• 670-739 (Good)
• 740-799 (Very good)
• 800-850 (Excellent)

FICO scoring factors 

FICO scores are calculated based on five key factors that assess your creditworthiness. These factors include:

1. Payment history (35%). Payment history is the most important factor and looks at whether you’ve paid your bills on time. Late payments, defaults, bankruptcies, or foreclosures negatively impact (lower) your score.
2. Amounts owed (30%) is a factor that considers how much debt you currently have and your credit utilization ratio (the amount of credit you’re using compared to your total available credit). If you're using a lot of your credit, it can bring your score down.
3. Length of credit history (15%). A longer credit history generally boosts your score because it gives lenders more insight into your financial behavior over time. This factor includes the average age of your accounts and the time since your newest account was opened.
4. New credit (10%). This factor looks at how many new credit accounts you’ve opened recently and how many inquiries have been made into your credit. Opening several new accounts in a short period can negatively affect your score.
5. Credit mix (10%) is a factor that considers the mix of credit accounts you have, such as credit cards, mortgages, installment loans, or retail accounts. A diverse mix may be beneficial if you’re managing the different forms of credit well.

These five factors combine to form your FICO score, with payment history and amounts owed being the most influential.

Good VantageScore range  

Scores in the “Good” range (661-780) indicate responsible credit behavior, while scores above 780 are considered excellent.

• 300-499 (Very poor)
• 500-600 (Poor)
• 601-660 (Fair)
• 661-780 (Good)
• 781-850 (Excellent)

VantageScore’s use of “Very Poor” and “Fair” reflects its somewhat broader scale, designed to capture more granularity in how consumers are evaluated, especially for those with less established credit histories or more recent credit events.

VantageScore scoring factors  

VantageScore is calculated using six key factors that assess a consumer’s creditworthiness. 

1. Payment history. This is the most important factor and looks at whether you’ve paid your bills on time. Late payments, bankruptcies, or collections can significantly lower your score.
2. Depth of credit. VantageScore considers how long you’ve had credit accounts and the diversity of those accounts. A longer credit history and a mix of credit types (like credit cards or loans) if managed well can improve your score.
3. Credit utilization is a factor that looks at how much of your available credit you’re using. Lower credit utilization (how much debt you have compared to your available credit) is viewed positively because it shows you’re using credit responsibly.
4. Balances. This looks at the total amount of debt you owe, including credit card balances and loans. Higher debt balances may lower your score.
5. Recent credit. This factor considers how many recent inquiries or credit accounts you’ve opened. Opening many new accounts in a short time can negatively impact your score.
6. Available credit. This refers to the total amount of credit you’re allowed to use. Having a higher credit limit compared to what you actually use can boost your score.

There are two versions of VantageScore — 3.0 and 4.0. VantageScore 4.0 is a newer version with updated features, like using more recent credit data and being able to score people with limited credit history.

Both VantageScore 3.0 and 4.0 credit scoring models use the same six factors presented above, but they assign different importance to each factor. For example, VantageScore 4.0 places more weight on recent credit behavior and  recent credit applications.

Payment history

• VantageScore 3.0: 40%
• VantageScore 4.0: 41%

Depth of credit

• VantageScore 3.0: 21%
• VantageScore 4.0: 20%

Credit utilization

• VantageScore 3.0: 20%
• VantageScore 4.0: 20%

Recent credit

• VantageScore 3.0: 5%
• VantageScore 4.0: 11%

Balances

• VantageScore 3.0: 11%
• VantageScore 4.0: 6%

Available credit

• VantageScore 3.0: 3%
• VantageScore 4.0: 2%

Each of these factors contributes to your overall VantageScore, with payment history and credit utilization being the most influential.

What affects your credit score the most  

Payment history is the most important factor that determines your credit score because late payments mean that you have a history of not meeting your financial obligations. This signals higher risk to lenders and can significantly hurt your score.

Credit utilization — how much of your available credit you’re using — also plays a key role. High utilization can lower your score because it suggests you’re relying too heavily on credit, which can suggest you're having trouble managing your finances or might struggle to repay your debt.

Other contributing factors include types of credit used, recent inquiries, balances, and credit age. But if having a high credit score is so important — how can you increase it? You can make your score go up by consistently paying your bills on time, paying down your debt, and keeping your credit usage low.

Keep in mind that missed payments, applying for too much new credit, or increasing your balances can cause your score to decrease. But the impact of these factors varies between different scoring models, like FICO and VantageScore, as each model may weigh these factors differently.

What factors credit scoring systems don’t take into account  

Credit scoring systems don’t consider the following information when calculating your credit score:

• Where you live (current or previous addresses)
• Personal demographics (age, race, religion, gender, or marital status)
• Income and employment details (salary, job title, employer, or work history), though lenders may use this info for their decisions.
• Soft inquiries (credit checks for non-lending purposes, such as marketing or preapprovals).

Overall, credit scoring systems focus on your credit behavior and financial habits, not your personal demographics, income, or employment details, to determine your score.

So, what’s a good credit score?   

A good credit score is likely to get you better interest rates, loan terms, and credit card offers. Even better if your score falls under the very good or excellent category.

Please note that the information provided here regarding the credit scores needed for various purposes is for informational use only. Each credit institution may have its own criteria for what constitutes a “good” score, and factors such as income, debt, and specific lending policies can influence their decisions.

What’s a good credit score to buy a house?

A score of 620-640 is typically considered the minimum for a conventional house mortgage. However, aiming for a score higher than 740 is recommended to secure more favorable interest rates.

What’s a good credit score to buy a car?

A score of 660-700 is generally considered good for car loans, while scores 740 and above usually qualify for better rates. 

What’s a good credit score to rent an apartment?

Most landlords prefer a score of 650 or higher, although it can vary depending on the landlord and the location.

What’s a good credit score to get a credit card?

You can typically qualify for most credit cards with a score of 650-700, but higher scores (700+) are better for premium cards with better rewards.

What’s a good credit score for a mortgage?

A score of 620 or higher is generally needed for a conventional mortgage, but if you aim for a score of 740+, you’ll be more likely to secure more favorable rates.

What’s a good credit score depending on age?

A good credit score varies by age, reflecting the length of one’s credit history and financial habits. Younger people typically have lower scores due to shorter credit histories, while older individuals often have higher scores because of more established credit patterns. At the end of the day, though, a good credit score is simply a high one — the higher your score, the better, no matter how old you are.

According to Experian’s 2023-2024 data, the average credit score (FICO) by age group was as follows:

• Generation Z (18-26) — 681
• Millennials (27-42) — 691
• Generation X (43-58) — 709
• Baby boomer (59-77) —746
• Silent generation (78+) — 759

These figures show that credit scores tend to improve with age, mainly due to longer credit histories and more established financial behaviors. However, individual scores can vary based on factors like payment history, credit utilization, and the types of credit accounts held. So how can you improve yours?

Ways to improve your credit score   

Improving your credit score is a gradual process, but with the right steps, you can see significant progress. These tips may help you boost your score:

• Pay your bills on time. Timely payments make up a large portion of your score. Set reminders or automate payments to avoid missing deadlines.
• Keep credit utilization low. Try to use less than 30% of your available credit. This shows lenders that you’re managing your credit responsibly.
• Avoid opening too many accounts at once. Too many credit accounts opened in a short period can hurt your score. Only apply for credit when you really need it.
• Check your credit report regularly using credit monitoring services. Make sure there are no errors or fraudulent accounts affecting your score. Dispute any inaccuracies with the credit bureaus immediately.
• Increase your credit limits. If you have good credit, ask for a limit increase. This can lower your credit utilization ratio without changing your spending. Just make sure to not increase your spending!
• Pay down your existing debt. Reducing high-interest debt helps lower your overall balance and improves your score over time.

Improving your credit score takes time, but with consistent effort, it can take anywhere from a few months to a couple of years. The more negative items (late payments, collections, or bankruptcies) you have on your credit report, the longer it may take to see a significant improvement. However, small changes like reducing credit card balances and paying bills on time can start making a positive impact within a few months.

How can NordProtect help you in managing your credit score?  

If managing your credit score seems like an overwhelming task, try using NordProtect — our identity theft protection service that simplifies keeping track of your credit score on a daily basis. If you know what’s going on with your credit score, it’s easier to take it under control. Here’s what NordProtect does:

• Makes it easy to check your credit score. Once you get the NordProtect app, all you need to do is open it to see your VantageScore 3.0® credit score. 
• Offers monthly credit summary. Each month, you get a concise overview of your credit history in your NordProtect app. 
• Alerts you about suspicious credit activity. If there is a new account opened in your name, a spike in hard inquiries, or you’re overdue on a loan payment, you’ll get a real-time alert in your NordProtect app, notifying you of the new credit activity, so you can act quickly to help prevent fraud. NordProtect will also direct you to the TransUnion® website, where you can freeze your credit file to protect it.

With NordProtect, it’s easier to keep track of your credit score and activity — and keep it where you want it to be.