By CreditNinja
Modified on May 15, 2024

Credit scores: they’re more than just numbers. They are the keys to your financial future, opening doors to loans, mortgages, and even influencing rental applications. But what exactly is a credit score? CreditNinja has the info you need.

A credit score is a three-digit number that represents how well individuals manage their money. The higher your score, the better you are with your finances. And while a credit score might feel like an impersonal three-digit number on a screen, it’s actually responsible for influencing many aspects of your day-to-day life. 

Lenders and financial institutions use this number to determine whether you qualify for loans, credit cards, and other financial products. So having a good credit score can be the difference between obtaining a personal loan, mortgage, or credit card, and struggling to make ends meet.

In simple terms, your credit scores are a measure of your financial reliability. Based on your past financial behavior, these scores tell lenders how likely you are to repay debts. Let’s dive into the nuances of credit scores, how they’re calculated, and their profound impact on your financial journey. 

Credit Score Ranges

Here’s a simple breakdown of each specific category of credit score. You can start to improve your financial situation when you determine where you land within the following categories:



Perfect Credit


Excellent Credit


Good Credit


Fair Credit


Poor Credit


Very Poor Credit


Bad Credit


Very Bad Credit


Where Does Your Score Fall?

What Factors Affect Your Overall Credit Scores?

Payment History
A record of past bill payments
Credit Utilization
Current debt again available credit
Length of Credit
Age of credit accounts
Credit Mix
Diversity of credit accounts
Credit Inquiries
Amount of hard credit inquiries

Learn More About Your Credit Scores

If this is where your credit score is, congratulations, you win. But perfect credit is not just about bragging rights; it unlocks the best rates and terms on a loan or credit card. Achieving this score isn’t easy; it requires financial discipline over a long period. It means you pay your bills on time, you manage your debt well, and you don’t take out unnecessary loans or credit cards. 

Stats and facts on perfect credit:

  • Only a small fraction, about 23%, reach this credit score range.¹
  • Only 1.6% of the scorable U.S. population has a score of 850.¹

Learn More About Your Score

800  802  804  806  808  810  812  815  818  820  822  830  840  844  850

Excellent credit gives you access to some of the top rates and terms available. You’re in a prime position to receive lower interest rates and premium credit offers. This category shows lenders and creditors that you are trustworthy and financially dependable. It doesn’t get too much better than excellent credit.  

Stats and facts on excellent credit:

  • 24% of Americans have a credit score in this range.²
  • Most high-income individuals fall within the excellent credit range.²

Learn More About Your Score

750  770   775  777  780  782  783  785  788  790  792  795  797  799

Good credit is your ticket to competitive loan offers. While not at the top, you’re still in a strong position. You make on-time payments most of the time, and you have a good grasp on your financial situation. You won’t receive the best offers out there, but you’re getting close. Keep focusing on all of the factors that affect your overall score, and eventually you can work your way up. 

Stats and facts on good credit:

  • 17% of the population falls within this range, proving it’s an achievable goal for many.²
  • This range is where you’ll find most middle-income individuals on average.²

Learn More About Your Score

700  702  705  708  710  712  714  718  720  725  730  740  745 

Fair credit means you’re on the right track, but there’s room for improvement. You’ll find reasonable offers, but the best ones might be just out of reach. You’ve made on-time payments before but it might not be a habit at this point. Focus on reducing your overall debt and improving your payment history to start seeing improvements. 

Stats and facts on fair credit:

  • 12% of Americans are within this range of credit scores.²
  • On average, most moderate-income and low-income consumers fall into this range.²

Learn More About Your Score

640  642  644  645  650  655  660  665  670  675  680  685  690  695  699

Having poor credit can be challenging. It often results in higher interest rates and limited credit options. However, it’s not the end of the road. The most important aspects of your score are on-time payments and credit utilization. Create habits that result in paying your debts on time, and lower your utilization ratio to start working your way up through the credit score ranges. 

Stats and facts on poor credit:

  • This credit score range only makes up 9% of the population.²
  • People in this range are very likely to have missed payments and significant debt.

Learn More About Your Score

571  575  580  585  590  595  600  605  610  615  620  625  630  639 

Very poor credit is a tough spot. It limits your financial options significantly, but remember, it’s still possible to improve your situation. In this range, you will likely have a difficult time being approved for traditional loans and credit cards. Many borrowers with these credit scores are forced to take out alternative loans like payday or title loan options. 

Stats and facts on very poor credit:

  • With dedication, the journey back to financial health is possible, though challenging.
  • 7% of Americans have a credit score between 500 and 570.²

Learn More About Your Score

500  501  502  503  504  505  506  507  508  509  510  520  524  525  530  535  545  550  555  560  565  570

Bad credit is a red flag in the financial realm, indicating a history of missed payments or defaults. But, it’s a situation many have successfully navigated out of. Remember, it’s still possible to achieve a good credit score. It may be wise to talk to a credit counselor or financially savvy friend or family member for advice. 

Stats and facts on bad credit:

  • This score range is a financial hurdle, but not an insurmountable one.
  • 6% of the population falls within the 400–499 score range.²

Learn More About Your Score

400  430  440  450  460  480  490  495  499

Very bad credit is a serious financial obstacle. It reflects significant credit mishaps and requires substantial effort to remedy. You likely won’t be able to get many financial products, loans, or credit cards until you improve your score. Luckily, there are still credit-building products and credit counselors out there to help you improve your credit reports. 

Stats and facts on very bad credit:

  • This range is fortunately rare but demands immediate attention and action.
  • Only 3% of Americans are struggling within the very bad credit range.²

Learn More About Your Score

300  315  350  370  380  399

What Is A Credit Report?

A credit report is a detailed document that outlines an individual’s credit history, compiled by credit bureaus. Your credit report includes crucial information such as the history of your loan and credit card payments, the total amount of credit available to you, the amount of credit you are currently using, and any bankruptcies or legal judgments against you. The report not only lists your current and past credit accounts and their statuses but also provides data on late payments, credit limits, and account balances. 

How Does it Affect My Credit Scores?

Your credit reports are the primary source of information used to calculate your credit scores. Credit scoring models, like FICO and VantageScore, analyze the data in your report to assign a score. They consider factors such as payment history, credit utilization ratio, length of credit history, types of credit accounts, and recent credit inquiries. It’s crucial to check your credit reports at least once a year. 

FAQs on Credit Scores

A credit score range is a numerical scale used by lenders and financial institutions to assess an individual’s creditworthiness. It typically ranges from 300 to 850, with higher scores indicating better credit health.

With most credit bureaus, a score of 700 or above is considered good. Scores from 750 to 850 are often deemed very good to excellent, providing access to better interest rates and loan terms.

Credit scores are usually categorized as follows: Very Bad (300-399), Bad (400-499), Very Poor (500-570), Poor (571-639), Fair (640-699), Good (700-749), Excellent (750-799), and Perfect (800-850).

You can check your credit score with each of the credit bureaus through various online platforms, many of which offer free services. Additionally, some banks and credit card issuers provide credit scores to their customers. Be wary of services that require payment for credit score checks, as free credit scores are usually available. 

The minimum score varies by lender, but generally, a score of 620 is considered the baseline for conventional mortgages. For other loans, the requirements can vary significantly based on the type of loan and the lender.

Yes, landlords often check credit scores to evaluate a potential tenant’s financial reliability. A higher score can improve your chances of being approved for a rental.

Improving your score involves paying bills on time, reducing debt levels, avoiding new credit inquiries, and correcting any inaccuracies on your credit report. It’s a gradual process that requires consistent financial discipline.

Yes, credit score systems and ranges can vary by country. For instance, the UK uses a different scoring system than the US. It’s important to understand the specific credit scoring system applicable in your country.

Absolutely. Lenders often have set criteria based on credit scores for loan approval. Higher scores usually mean more favorable loan terms, while lower scores might lead to higher interest rates or loan denial.

It’s a good practice to check your credit score at least annually. This helps you stay informed about your credit health and allows you to address any errors or issues promptly. Some people check more frequently, especially if they are actively working to improve their scores or preparing for a major financial decision.

Key Takeaways on Your Credit Score & Credit Report

What Are Credit Scores and Why Do They Matter?

A credit score is a numerical representation of your creditworthiness, based on your credit history. It’s crucial because it influences lenders’ decisions on whether to extend credit or loans to you and under what terms, affecting everything from credit card approvals to mortgage rates.

How are Credit Scores Created?

Credit scores are calculated using data from your credit reports. The main factors include payment history, credit utilization (how much credit you’re using compared to your limits), length of credit history, types of credit in use (like credit cards, auto loans), and recent credit inquiries or new credit accounts.

Maintaining a Healthy Score

Consistently paying bills on time and keeping credit card balances well below the limits are critical for a good score. High credit utilization or late payments can significantly lower your score.

The Impact of Your Credit Score

Your credit score can affect your ability to get loans, credit cards, and even influence non-lending situations like rental agreements, employment opportunities, and insurance premiums. Higher scores generally unlock better interest rates and more favorable terms.

Understanding these key points about credit scores helps you make informed financial decisions and take steps to improve or maintain your credit health.


  1. Is 800 a Good Credit Score? | CNBC
  2. The Average Credit Score in America | The Ascent