What Qualifies as a "Good" Credit Score?

A credit score is a number that indicates your creditworthiness. The higher your score, the higher are your chances of being approved for credit cards and loans, and the better the APRs you’ll receive from lenders. A good credit score also means you won’t have to pay a security deposit on utility services. Plus, you’ll find it easier to get approval for rental houses and apartments.

Credit scores are calculated differently on FICO and VantageScore.

⇨Credit scores that fall between 670 to 739 are defined by FICO as "good."

⇨Credit scores that fall between 661 to 780 are defined by VantageScore as "good."

FICO Score: Key factors to consider

➤Payment history (35% of your score)

➤Amounts owed/ utilization rate (30%)

➤Length of your credit history (15%)

➤New credit (10%)

➤The variety of credit products you have (10%)

VantageScore: Key factors to consider

➤Payment history (Extremely influential)

➤Type and duration of credit, plus percent of credit limit used (Highly influential) 

➤Total balances/debt (Moderately influential)

➤Available credit along with recent credit behavior and inquiries (Less influential)

To establish or maintain good credit, you should:

➤Always pay all your bills on time. Contact the lender immediately if you’re having trouble paying a bill. Do not skip payments, even if you’re disputing a bill.

➤Pay off any debts you may have as quickly as you can.

➤Ensure your credit card balance stays well below the limit. 

➤Apply for credit sparingly. Do not apply for multiple credit accounts within a short span of time.

➤Request a free copy of your credit report. Check it regularly to detect errors and get them corrected before any damage is done.

Because of all the doors it unlocks, a good credit score is something you can and should be proud of, especially if you've had to work hard to improve it. If you've always had a good credit score, keep doing what it takes to maintain it.