What Is Considered a Decent Credit Score?

A credit score of 670 or above is widely considered to be a good credit score. There are several different companies who each use different scoring systems, but this score is generally seen as “good” across several of them. 

While you may hear a lot about how credit scores are important, the first step is understanding what exactly a credit score is. Basically, it’s a three-digit number that tells lenders, banks, employers, and financial institutions how trustworthy you are and how well you handle money. Oftentimes, your credit score plays a large role in determining whether or not you will be approved for certain loans and types of credit. 

There are three main companies that track your credit score and your financial behavior. They are Experian, Equifax, and TransUnion. Each of these companies tracks your borrowing and credit habits and assigns you a score based on them. 

The most common credit-scoring model, which you’ve likely heard of, is called a FICO score. The FICO score ranges from 300 to 850, with a higher score indicating you’re more creditworthy. Here’s how the FICO score breaks down: 

  • 300 to 580 – Poor credit
  • 580 to 669 – Fair credit
  • 670 to 739 – Good credit
  • 740 to 799 – Very good credit
  • 800+ – Exceptional credit

A score below 670 may make life more difficult for a number of reasons. You may have a difficult time being approved for loans, credit cards, lines of credit, and more. And even if you are approved, the interest rate and terms you’re offered may not be as favorable. Typically, people with low credit scores are offered high interest rates. This is because the lenders can’t be certain that you’ll repay the loan based on your borrowing history. 

If you do have a low credit score, the best thing you can do is start to practice better financial habits. A big part of improving your credit score will be making sure you’re always making your payments on time. Whether it’s for a loan, rent, your credit card, or any other payments. On-time payments can help to improve your credit. The next steps will be to pay off your debts and lower your credit card usage.

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