Credit scores range from 300 to 850. Those three digits might seem arbitrary, but they matter — a lot. A good credit score is key to qualifying for the best credit cards, mortgages and competitive loan rates.
When you apply for credit, the lender will review your credit report to determine your eligibility based on this information, which includes that three-digit number known as your credit score.
That magic number tells lenders your potential credit risk and ability to repay loans. Credit scores consider various factors, such as payment history and length of credit history from your current and past credit accounts.
There are two main credit scoring systems: FICO and VantageScore, and they aren’t created equal. FICO Scores are more valuable, as lenders pull your FICO Score in over 90% of U.S. lending decisions.
Below, CNBC Select explains what is a good credit score for FICO and VantageScore, how good credit can help you, tips on getting a good credit score and how to check your score for free.
Credit score ranges vary based on the credit scoring model used (FICO versus VantageScore) and the credit bureau (Experian, Equifax and TransUnion) that pulls the score. Below, you can check which credit score range you fall into, using estimates from Experian.
Credit scores are calculated differently depending on the credit scoring model. Here are the key factors FICO and VantageScore consider.
A good credit score can help you receive better-than-average APRs from lenders and increased approval odds for credit. With good credit, you have better chances at qualifying for a mortgage, lease or car loan.
Many of the best credit cards require good or excellent credit. If you want to benefit from competitive rewards, annual statement credits, balance transfers and more, you’ll need at least a good credit score.
If you want to take advantage of all the Chase Sapphire Preferred® offers, for example, such as 25% more value on points redeemed for travel via Chase Ultimate Rewards®, you’ll need good or excellent credit. And if you want to get out of debt with a balance transfer credit card, such as the Citi Simplicity® Card, you’ll also need good or excellent credit.
Even if your credit score falls within the good range, that is not a guarantee you’ll be approved for a credit card requiring good credit. Card issuers look at more factors than just your credit score, including income and monthly housing payments.
About six in 10 Americans (64%) worry that their credit score will prevent them from achieving a financial goal, according to CreditWise from Capital One’s Financial Milestones survey. If you have poor or fair credit, follow these tips to help raise your credit score.
There are dozens of free credit score services available that offer your free FICO Score or VantageScore. Here are some popular free credit score resources.