What's considered a good credit score?

Credit score ranges can vary slightly depending on the credit scoring model used, but they generally fall within a similar range. The most commonly used credit scoring model is the FICO Score, and here are the typical credit score ranges:

1. Exceptional Credit: 800-850

   • Individuals in this range are considered to have exceptional credit. They are likely to qualify for the most favorable interest rates and terms on loans and credit cards.

2. Very Good Credit: 740-799

   • People with very good credit scores have a strong credit history. They are also likely to qualify for competitive interest rates and favorable terms on credit products.

3. Good Credit: 670-739

   • A good credit score indicates responsible credit management. Borrowers with good credit may still qualify for reasonable interest rates and terms.

4. Fair Credit: 580-669

   • Credit scores in the fair range suggest a moderate level of credit risk. Borrowers in this range may encounter higher interest rates and less favorable terms.

5. Poor Credit: Below 580

   • Credit scores below 580 are considered poor. Individuals in this range may have difficulty qualifying for many credit products, and if they do, they often face high-interest rates and less favorable terms.

It's important to note that these ranges are general guidelines and can vary slightly between different credit scoring models and lenders. Additionally, lenders may have their own criteria for what they consider a good or acceptable credit score for their specific products.

A good credit score is often a key factor in obtaining favorable financial products, such as low-interest-rate mortgages, credit cards with rewards, and personal loans with competitive terms. A strong credit history can also be beneficial when renting a home or apartment or securing insurance at more favorable rates.

Building and maintaining good credit involves responsible financial behaviors, such as paying bills on time, keeping credit card balances low, avoiding excessive debt, and regularly monitoring your credit reports for errors and signs of identity theft. Over time, these practices can help you achieve and maintain a good credit score, providing you with financial flexibility and better access to credit.