What Is Considered A Good Credit Score?

Understanding what constitutes a "good" credit score is crucial for accessing financial products like loans, mortgages, and even rental agreements. This guide breaks down credit score ranges, factors influencing them, and strategies to achieve and maintain an excellent score in 2025.

Understanding Credit Scores: The Foundation

Your credit score is a three-digit number that lenders use to assess your creditworthiness – essentially, how likely you are to repay borrowed money. It's a critical component of your financial health, influencing your ability to secure loans, rent an apartment, and even get a job in some industries. In 2025, the importance of a strong credit score remains paramount. This number is not static; it fluctuates based on your financial behaviors. Understanding its components and how it's calculated is the first step toward managing it effectively. Think of it as your financial report card, reflecting your history of managing debt. A higher score signals to lenders that you are a responsible borrower, reducing their risk and making them more willing to offer you favorable terms.

What Is Considered A Good Credit Score? The 2025 Breakdown

The question "What is considered a good credit score?" doesn't have a single, universal answer, as different lenders and credit scoring models may have slightly different benchmarks. However, the most widely used scoring models, FICO and VantageScore, provide general ranges that offer a good indication of your credit standing. As of 2025, here's a breakdown of what's generally considered good, very good, and excellent:

FICO Score Ranges (2025)

The FICO score is the most prevalent credit scoring model used by lenders. It ranges from 300 to 850. Here's how FICO scores are typically categorized:

Exceptional: 800-850: This is the highest tier. Borrowers with scores in this range are considered ideal. They typically qualify for the best interest rates and terms on loans and credit cards.
Very Good: 740-799: Scores in this range are still excellent and indicate a very low risk to lenders. You'll likely receive very favorable loan offers.
Good: 670-739: This is the most common range for a "good" credit score. Lenders generally view individuals in this category as responsible borrowers. You'll likely qualify for most loans, though perhaps not always at the absolute lowest interest rates.
Fair: 580-669: Scores in this range suggest a higher risk to lenders. You might still be approved for credit, but often with higher interest rates and less favorable terms. Some lenders may deny credit altogether.
Poor: 300-579: This range indicates significant credit risk. It can be challenging to obtain new credit, and if approved, interest rates will likely be very high.

VantageScore Ranges (2025)

VantageScore is another popular credit scoring model, often used by credit card issuers and for pre-qualification offers. It also ranges from 300 to 850. The categories are similar to FICO, with slight variations:

Excellent: 781-850: Similar to FICO's exceptional range, this indicates top-tier creditworthiness.
Good: 661-780: This range encompasses what most would consider a good to very good credit score. You'll likely get approved for most credit products with competitive rates.
Prime: 661-780: While VantageScore uses "Good," many lenders might categorize this range as "Prime," indicating a solid borrower.
Less Than Prime: 601-660: This is comparable to FICO's "Fair" category. Approvals are possible, but with higher costs.
Subprime: 500-600: This range signifies a high risk, similar to FICO's "Poor" category.
Extreme Risk: 300-499: The lowest tier, indicating significant credit challenges.

What is Generally Considered "Good" in 2025?

For practical purposes, a credit score of 670 and above is generally considered "good" by most lenders using FICO. If you're aiming for the best rates and terms, targeting a score of 740 and above (very good) or even 800 and above (exceptional) is ideal. For VantageScore, a score of 661 and above falls into the "Good" or "Prime" category, which is a solid target.

It's important to remember that "good" is subjective and depends on the specific financial product and lender. For instance, securing a mortgage with the absolute lowest interest rates might require a score in the high 700s or even 800s, while getting approved for a basic credit card might be possible with a score in the mid-600s.

Key Factors That Shape Your Credit Score

Your credit score isn't a mystery; it's a reflection of your financial habits. Understanding the factors that influence it is key to improving and maintaining a good score. While the exact weighting of each factor is proprietary to the scoring models, the general categories remain consistent. In 2025, these core elements continue to be the most influential:

1. Payment History (The Most Important Factor)

This is the single biggest determinant of your credit score, typically accounting for about 35% of your FICO score. Lenders want to see that you pay your bills on time, every time. Late payments, even by a few days, can significantly damage your score. A single 30-day late payment can drop your score by dozens of points, and multiple late payments or collections will have an even more severe impact. Conversely, a long history of on-time payments is a powerful positive signal.

On-time payments: Consistently paying your credit card bills, loan installments, and other debts by their due date.
Late payments: Missing a payment deadline. The severity increases with how late the payment is (30, 60, 90+ days).
Collections: Accounts that have been sent to a collection agency due to non-payment.
Bankruptcies and judgments: These are severe negative marks that can stay on your report for many years.

2. Amounts Owed (credit utilization)

This factor, often referred to as credit utilization ratio (CUR), accounts for about 30% of your FICO score. It measures how much of your available credit you are using. Keeping your credit utilization low is crucial. High utilization suggests you might be overextended and a higher risk.

Credit Utilization Ratio (CUR): This is calculated by dividing the total balance on your revolving credit accounts (like credit cards) by your total credit limit. For example, if you have a credit card with a $10,000 limit and a balance of $3,000, your CUR is 30%.
General Guideline: Experts recommend keeping your CUR below 30%, and ideally below 10%, for the best impact on your score. It's best to pay down balances before the statement closing date, as this is when lenders typically report your balance to the credit bureaus.
Multiple Credit Cards: While overall utilization matters, it's also beneficial to keep the utilization low on each individual card.

3. Length of Credit History

This factor, making up about 15% of your FICO score, looks at how long your credit accounts have been open and how long you've been using credit. A longer credit history generally indicates more experience managing credit, which is viewed positively.

Average Age of Accounts: The average age of all your open credit accounts.
Age of Oldest Account: The age of your oldest credit account. Keeping older, well-managed accounts open, even if you don't use them often, can help your credit history length.
New Accounts: Opening too many new accounts in a short period can lower the average age of your accounts and negatively impact your score.

4. Credit Mix

This accounts for about 10% of your FICO score. It refers to the variety of credit accounts you have. Lenders like to see that you can manage different types of credit responsibly, such as revolving credit (credit cards) and installment loans (mortgages, auto loans, personal loans).

Revolving Credit: Credit cards, lines of credit.
Installment Credit: Mortgages, auto loans, student loans, personal loans.
Diversity is Key: Having a mix of these can be beneficial, but it's not worth taking out loans you don't need just to improve your credit mix. Responsible management of the credit you have is far more important.

5. New Credit

This factor, also contributing about 10% to your FICO score, considers how often you apply for and open new credit accounts. Opening multiple new accounts in a short time can signal increased risk to lenders.

Hard Inquiries: When you apply for credit, lenders typically perform a "hard inquiry" on your credit report. Too many hard inquiries in a short period can lower your score.
Shopping for Loans: Credit scoring models are designed to allow you to "rate shop" for certain types of loans (like mortgages or auto loans) within a specific timeframe (usually 14-45 days) without significantly penalizing your score. These inquiries are often treated as a single inquiry.
New Accounts: Opening several new accounts quickly can also negatively impact this factor.

How Credit Scores Are Calculated: The FICO and VantageScore Models

Understanding the mechanics behind credit scoring can demystify the process and empower you to make better financial decisions. While the precise algorithms are proprietary, both FICO and VantageScore rely on the same fundamental data points found in your credit reports from the three major credit bureaus: Equifax, Experian, and TransUnion. In 2025, these models continue to evolve, but their core principles remain consistent.

The FICO Score Calculation

FICO is the most widely used credit scoring model, with various versions available. The FICO Score 8 is a common version, and FICO Score 9 and the latest FICO Score 10 are also gaining traction. The general categories and their approximate weightings are as follows:

FICO Score Breakdown (Approximate Weights):

Factor	Approximate Weight	Description
Payment History	35%	On-time payments, late payments, collections.
Amounts Owed (Credit Utilization)	30%	Ratio of debt to credit limit on revolving accounts.
Length of Credit History	15%	Average age of accounts, age of oldest account.
Credit Mix	10%	Variety of credit types (revolving vs. installment).
New Credit	10%	Number of recent credit applications and new accounts.

FICO Score 9 and FICO Score 10 have introduced some nuances. For example, FICO Score 9 and 10 generally ignore past medical debt and are more forgiving of minor delinquencies if they are significantly old. FICO Score 10 also analyzes trends over time, looking at your credit behavior across a longer period, and may consider the credit behavior of others if you are a joint account holder.

The VantageScore Model

VantageScore is a collaborative effort by the three major credit bureaus. It's designed to be more consistent across different bureaus and has a broader score range (501-990 for older versions, but more commonly presented as 300-850 now, similar to FICO). The factors are similar, but the emphasis can differ slightly:

VantageScore Breakdown (Approximate Weights):

Factor	Weighting	Description
Payment History	Extremely Influential	Timeliness of payments is paramount.
Credit Utilization	Highly Influential	Percentage of credit limit used.
Credit Age and Mix	Highly Influential	Combines length of credit history and diversity of credit types.
New Credit	Moderately Influential	Recent credit applications and account openings.
Available Credit	Less Influential	The total amount of credit you have access to.

VantageScore 4.0, the latest version, also introduced trended data analysis, which examines credit behavior over time, similar to FICO 10. It also emphasizes consistency in credit management.

The Role of Credit Bureaus

Your credit score is derived from the information in your credit reports. These reports are compiled by Equifax, Experian, and TransUnion. Each of these bureaus collects data from lenders, creditors, and public records about your credit activity. It's crucial to ensure the information on your credit reports is accurate, as errors can negatively impact your score. You are entitled to a free credit report from each bureau annually via AnnualCreditReport.com.

The Perks of Having a Good Credit Score

Achieving and maintaining a good credit score is more than just a financial goal; it unlocks a world of opportunities and savings. In 2025, the advantages of a strong credit profile are more pronounced than ever, offering tangible benefits that impact your daily life and long-term financial well-being.

1. Lower Interest Rates on Loans and Credit Cards

This is perhaps the most significant benefit. Lenders view individuals with good credit scores as less risky borrowers. Consequently, they are willing to offer lower interest rates on mortgages, auto loans, personal loans, and credit cards. Over the life of a loan, these savings can amount to thousands or even tens of thousands of dollars.

Example:

Consider a $300,000 mortgage. If you have a credit score of 760, you might qualify for a 30-year fixed rate of 6.5%. If your score is 670, you might only qualify for 7.5%. The difference in monthly payments is substantial, and over 30 years, you could pay over $100,000 more in interest with the lower score.

2. Easier Approval for Loans and Credit Cards

A good credit score significantly increases your chances of being approved for credit products. Whether you're applying for a new credit card, a car loan, or a mortgage, a strong score makes you a more attractive applicant. This means less stress and fewer rejections when you need to access credit.

3. Better Terms and Higher Credit Limits

Beyond just approval, a good credit score often translates to more favorable terms. This can include lower fees, longer repayment periods, or higher credit limits on credit cards. Higher credit limits, when managed responsibly, can help keep your credit utilization ratio low, further benefiting your score.

4. Access to Premium Rewards and Benefits

Many of the best rewards credit cards, offering lucrative cash back, travel points, or other perks, are reserved for applicants with good to excellent credit. Having a good score allows you to leverage these cards to maximize your spending and earn valuable rewards.

5. Easier to Rent an Apartment

Landlords often check credit scores as part of the tenant screening process. A good credit score indicates that you are reliable and likely to pay your rent on time, making it easier to secure your desired living space. A poor score can lead to rejections or require a larger security deposit.

6. Lower Insurance Premiums

In many states, insurance companies use credit-based insurance scores to help determine premiums for auto and homeowners insurance. Statistically, individuals with higher credit scores tend to file fewer claims. As a result, a good credit score can lead to lower insurance rates.

7. Avoiding Security Deposits for Utilities

When setting up utilities like electricity, gas, or even a mobile phone plan, companies often check your credit. A good credit score can help you avoid paying hefty security deposits, saving you upfront costs.

8. Increased Negotiating Power

When you have excellent credit, you're in a stronger position to negotiate terms with lenders. You can often shop around and compare offers, using one lender's competitive rate to negotiate an even better deal with another. Your good score signals that you have options.

9. Financial Peace of Mind

Ultimately, a good credit score provides a sense of financial security and freedom. It means you have a solid foundation to build upon, allowing you to pursue major life goals like buying a home, starting a business, or handling unexpected emergencies with greater ease.

Strategies to Improve Your Credit Score

If your credit score isn't where you'd like it to be, don't despair. Improving your credit is a journey that requires consistent effort and smart financial habits. By focusing on the key factors that influence your score, you can make significant progress. Here are actionable strategies for 2025:

1. Pay All Bills on Time, Every Time

As mentioned, payment history is the most critical factor. Make it your top priority. Set up automatic payments for your credit cards and loans to ensure you never miss a due date. If you do miss a payment, pay it as soon as possible. Contact your lender to see if they can waive late fees or remove the delinquency from your report, especially if it's a first-time occurrence.

Action Step: Enroll in auto-pay for all your credit accounts. Set up calendar reminders a few days before the due date as a backup.

2. Reduce Your Credit Utilization Ratio (CUR)

Aim to keep your CUR below 30%, and ideally below 10%. If you have high balances, focus on paying them down. Prioritize paying down cards with the highest interest rates first (the "avalanche" method) or those with the highest utilization ratios (the "snowball" method, which can provide psychological wins).

Action Step: Make extra payments throughout the month, not just once. Pay down balances on cards with high utilization first.
Action Step: Consider asking for a credit limit increase on existing cards. If approved, this will lower your CUR without you spending more, assuming your balance stays the same.

3. Avoid Opening Too Many New Accounts at Once

While having a mix of credit can be good, opening multiple new accounts in a short period can hurt your score. Only apply for credit when you truly need it. If you're shopping for a mortgage or auto loan, do so within a concentrated period (typically 14-45 days) to minimize the impact of multiple hard inquiries.

Action Step: Before applying for new credit, assess if it's genuinely necessary and if you meet the eligibility criteria.

4. Keep Old, Unused Credit Accounts Open

The length of your credit history matters. If you have old credit cards that you no longer use but have a good payment history on, consider keeping them open. Closing them can reduce your average account age and potentially increase your credit utilization ratio if they were your only accounts with high limits.

Action Step: Make a small purchase on an old card every few months and pay it off immediately to keep it active and prevent the issuer from closing it due to inactivity.

5. Check Your Credit Reports Regularly for Errors

Mistakes on your credit report can drag down your score. Obtain your free credit reports from Equifax, Experian, and TransUnion annually via AnnualCreditReport.com. Review them carefully for any inaccuracies, such as incorrect personal information, accounts you don't recognize, or erroneous late payment marks. Dispute any errors you find immediately with the credit bureau and the creditor.

Action Step: Schedule a reminder to pull your credit reports every 4-6 months from different bureaus to ensure ongoing accuracy.

6. Consider a Secured Credit Card or Credit-Builder Loan

If you have a very low credit score or no credit history, these tools can be invaluable. A secured credit card requires a cash deposit that typically becomes your credit limit. A credit-builder loan involves making payments on a loan that is held in a savings account until it's fully repaid. Both report your payment activity to the credit bureaus, helping you build a positive credit history.

Action Step: Research reputable secured credit cards or credit-builder loans offered by banks or credit unions.

7. Become an Authorized User

If a trusted friend or family member with excellent credit is willing to add you as an authorized user to their credit card, their positive payment history and low utilization on that account can potentially benefit your score. However, be aware that their negative activity could also affect you, and their credit limit and utilization on that card will be factored into your report.

Action Step: Discuss this option with someone you trust implicitly and ensure they understand the responsibilities involved.

8. Be Patient

Improving a credit score takes time. Negative marks like late payments or collections will eventually fall off your report (typically after 7 years), but positive actions build credit gradually. Focus on consistent, responsible behavior, and your score will improve over time.

Maintaining an Excellent Credit Score Long-Term

Once you've achieved a good or excellent credit score, the goal shifts to maintaining it. This involves continuing the good habits you've established and being mindful of potential pitfalls. Long-term credit health is about consistent responsibility. Here’s how to keep your score in top shape for 2025 and beyond:

1. Continue Prioritizing On-Time Payments

This cannot be stressed enough. Even a single missed payment can cause your score to drop significantly, potentially undoing months or years of hard work. Set up automated payments, use calendar reminders, and always ensure you have sufficient funds in your account to cover your obligations. If you anticipate difficulty making a payment, contact your lender proactively to discuss options.

2. Keep Credit Utilization Low and Consistent

Maintaining a low credit utilization ratio (ideally under 10%) is key to preserving an excellent score. Don't let your balances creep up, even if you can afford the minimum payments. Regularly monitor your balances and pay them down. If you have multiple credit cards, ensure that none of them are nearing their credit limits.

Strategy: Aim to pay off your credit card balances in full each month. This not only keeps utilization low but also helps you avoid paying interest.

3. Avoid Unnecessary Credit Applications

Resist the urge to apply for new credit just because it's available or you see a tempting offer. Each hard inquiry can slightly lower your score, and opening too many new accounts can signal risk. Only apply for credit when you have a specific, well-thought-out need.

4. Monitor Your Credit Reports Periodically

Even with excellent credit, it's wise to continue checking your credit reports from Equifax, Experian, and TransUnion at least once a year. This helps you catch any errors or fraudulent activity early. Promptly dispute any inaccuracies you find.

5. Manage Your Credit Mix Wisely

While you shouldn't take out loans you don't need, maintaining a healthy mix of credit types (revolving and installment) can be beneficial. If you have a mortgage and an auto loan, and primarily use credit cards for daily spending, you likely have a good mix. Avoid closing older, well-managed installment loans unless there's a compelling financial reason to do so, as this can impact your credit history length.

6. Be Mindful of Joint Accounts and Guarantees

If you co-sign a loan or become an authorized user on someone else's account, their financial behavior will impact your credit. Ensure that anyone you share an account with is as financially responsible as you are. If their actions lead to delinquency, it will affect your score.

7. Understand the Impact of Closing Accounts

Closing a credit card account can reduce your overall available credit, potentially increasing your credit utilization ratio. It can also shorten your average credit history length if it's one of your older accounts. Generally, it's better to keep older, well-managed accounts open, even if you use them sparingly.

8. Stay Informed About Credit Scoring Changes

Credit scoring models are updated periodically. While the core principles remain, newer versions of FICO and VantageScore may incorporate new data points or adjust weightings. Staying informed can help you adapt your strategies if necessary.

9. Build an Emergency Fund

Having an emergency fund can prevent you from relying on credit cards or loans during unexpected financial hardships, such as job loss or medical emergencies. This proactive step protects your credit score from damage caused by unforeseen circumstances.

Debunking Common Credit Score Myths

The world of credit scores is often shrouded in misinformation. Understanding the facts is crucial for effective credit management. Here are some common myths about credit scores that persist in 2025:

Myth 1: Checking Your Own Credit Score Lowers It.

Fact: This is false. When you check your own credit score or review your credit report, it's considered a "soft inquiry." Soft inquiries do not affect your credit score. Only "hard inquiries," which occur when you apply for new credit, can have a minor impact.

Myth 2: You Need to Carry a Balance on Your Credit Card to Build Credit.

Fact: This is a harmful myth. The best way to build credit is to pay your bills on time. Carrying a balance means you're paying interest, and high balances can negatively impact your credit utilization ratio. It's ideal to pay your statement balance in full each month.

Myth 3: Closing Unused Credit Card Accounts Will Immediately Boost Your Score.

Fact: Closing accounts can actually hurt your score. It reduces your total available credit, which can increase your credit utilization ratio. It also reduces the average age of your credit accounts, a factor in score calculation. It's generally better to keep older, unused cards open and manage them responsibly.

Myth 4: Your Credit Score is the Same Everywhere.

Fact: While your credit reports from the three major bureaus (Equifax, Experian, TransUnion) are similar, they are not identical. Different lenders pull reports from different bureaus. Furthermore, there are various scoring models (FICO, VantageScore, and different versions within each), so your score can vary depending on which model and bureau is used.

Myth 5: A Medical Bill in Collections Will Always Ruin Your Credit Score.

Fact: While medical debt in collections can negatively impact your score, newer scoring models (like FICO Score 9 and 10, and VantageScore 4.0) are becoming more lenient with medical debt. Often, medical debt that has been paid off or is under a certain age may not be factored into your score at all. It's still important to address it, but its impact might be less severe than other types of debt.

Myth 6: It Takes Years to Recover from a Single Late Payment.

Fact: While a late payment is negative, its impact diminishes over time. A single 30-day late payment will have a more significant impact than a 90-day delinquency. The longer you demonstrate responsible credit behavior after a late payment, the less it will affect your score. Negative marks typically fall off your report after seven years.

Myth 7: Your Credit Score is Based Solely on Your Income.

Fact: Your income is not directly factored into your credit score. Credit scores are based on your credit history and how you manage debt, not how much money you earn. However, lenders do consider your income when determining how much credit you can afford, which is separate from your credit score.

Myth 8: You Can Remove Accurate Negative Information from Your Credit Report.

Fact: You cannot legally remove accurate and negative information from your credit report before it naturally ages off (typically 7 years for most negative items, 10 years for bankruptcies). Be wary of credit repair companies that promise to do this, as they are often scams. The only way to "remove" negative information is to ensure it's inaccurate and dispute it, or to wait for it to expire.

Conclusion: Your Credit Score Journey in 2025

Understanding "What is considered a good credit score?" is the foundational step in your financial journey for 2025. As we've explored, a score of 670 and above generally signifies a "good" credit standing, with scores of 740+ being "very good" and 800+ "exceptional." These benchmarks are crucial because a strong credit score unlocks significant financial advantages, including lower interest rates, easier loan approvals, better terms, and access to premium rewards. The power to achieve and maintain such a score lies in understanding the key factors: payment history, credit utilization, length of credit history, credit mix, and new credit. By consistently paying bills on time, keeping credit utilization low, and monitoring your reports for accuracy, you are actively building a positive credit profile. Remember that improving your credit is a marathon, not a sprint, but with consistent, informed actions, you can significantly enhance your financial standing. Prioritize responsible credit management, debunk common myths, and leverage the strategies outlined to not only reach but also sustain an excellent credit score throughout 2025 and beyond. Your credit score is a powerful tool; wield it wisely.