Good, Bad, or Excellent: What Does Your Credit Score Mean?

By Amy Lu. Last updated 13 May 2016. 0 comments

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Your credit score is one of the most important numbers for gauging your financial health. If you want to apply for loans or a credit card, rent an apartment, or if you’re looking for a new job, lenders, landlords, and prospective employers will look at this number to see how credit-worthy you are.

While different credit reporting agencies will use different ranges and algorithms to determine your score, most lenders will look at your FICO score (developed by the Fair Isaac Company) — which goes from 300 to 850. The higher your score, the better you look…but what qualifies as high enough, and what is too low? The cutoff for each range may be a little fluid, but generally, this is what it looks like:

Below 630: Bad Credit

There are many scenarios that can lead to a low credit score: bankruptcy, consistently-missed payments, or even just a lack of credit history — the case for many young people. Having bad credit means higher interest rates, higher fees, and limited credit card options (your best bet may be a secured card). However, there are ways to build up your credit score if you find yourself on the low end; it’ll just take some time and discipline. (See also: Rebuild Your Credit in 8 Steps)

630-689: Fair/Average Credit

Having too much “bad” debt can put your credit score in this range. You may have a lot of credit card debt, or your credit card balance is often uncomfortably close to the limit. Lenders will need some convincing if you score is below 689. Your options for loans and credit will be limited, but there are a few credit cards that only require a fair/average credit score. Meanwhile, work on those habits that will bump you up the good (and eventually excellent!) credit range.

690-719: Good Credit

Being in this range means that you have a solid credit history and your accounts are in good standing, though you may have had a late payment or some extra credit card debt to deal with in the past. But generally, lenders likely won’t have an issue loaning money to you. With good credit, you can enjoy low rates and your choice of most credit cards, including those that allow you to earn rewards.

720-850: Excellent Credit

This is where you want to be. If you have an excellent credit score, you likely have a long credit history unmarked by the usual things that can ding your score: late payments, collections accounts, bankruptcies, and the like. Having multiple lines of credit, as well as several different kinds of credit, will also get you into this range. You’ll likely receive the best interest rates, the best repayment terms, and the lowest fees. Want a premium credit card with attractive rewards and sign-up bonuses? Take your pick. (See also: Best Credit Cards for People With Excellent Credit)

Having a good or excellent credit score, however, doesn’t mean you should get complacent! You don’t want your score to take a nosedive because of unexpected hits to your finances. Building in a decent buffer will allow you to retain a healthy score even if you miss a payment once or twice.

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