What Is an Excellent Credit Score?

As of April 2022 the average FICO Score was 716. FICO scores typically range between 300 and 850. A FICO of 716 is within the range of "good credit", which is 670-739. You can consider your credit score above 716 if it is higher than the average in the U.S.

What is an excellent score in credit? The bar of excellence starts before 800. However, the number that must be beaten depends on which version (and credit score) was used.

Let's look at the two most popular score types, FICO and VantageScores.

What is an excellent credit score?

FICO scores come in many different versions, but here is a general breakdown of the five FICO ranges:

Poor: 579 or lower

You might think that a score of 800 is required. To be considered "exceptional," you need a FICO score of 800. However, this is not necessary to receive the best rates on loans and credit cards.

According to Informa, if you have a minimum score of 760, you are eligible for the lowest rate available that day. You would get the same rate if you had an 820. You may not be technically exceptional to FICO if you have a score of 760, but does it matter? It doesn't matter if you qualify for the lowest rates if you are still eligible.

VantageScore credit scores are listed below:

Poor: 300 to 499

A FICO score of 750 is considered to be a very high score. A 750 VantageScore, however, is considered only a good score. Because the factors are not weighted in exactly the same way, you cannot compare scores of different types.

What affects your credit score?

FICO scores are based on five factors.

New Credit: 10%

You can see that the emphasis is on credit usage and payment history. These two factors are also included in most credit scores but they are weighted differently.

VantageScore does not give percentages of the factors that go into calculating a score. It focuses instead on how "influential a category may be."

How it works

Age: less important in credit history.

What is an excellent credit score?

A good credit score can help you save money. You'll qualify for lower-cost loans and the best credit cards, as well as, in some states, lower insurance rates.

A good credit score can be very valuable in an emergency situation, like a costly home repair. It will help you to get a loan at a lower interest rate. When you are in credit card debt, a high score can help you qualify for a balance transfer card with 0% APR, which will allow you to pay your debt off while paying no interest.

You can enjoy a sense of security by having good credit. If something goes wrong, like a loss of employment, you know you can get credit cards or loans to help.

How to find your credit score

Some credit card companies include free credit scores in your monthly statement. These include VantageScores and FICO scores. VantageScores can give you a good indication of your credit score. About 90% of lenders evaluate applicants using FICO scores.

Apps that provide free credit scores are available. Others cover personal finance topics such as tracking your expenses and budgeting. You can also get a free credit score from the bank where you keep your savings and checking accounts.

These days, you don't need to search far to get a free credit report!

Improve Your Credit Score

FICO scores are generated after six months of account information. VantageScore can calculate a score if you've had at least one full month of credit activity in the past 24 months.

It's not your choice which credit score is used, but it's up to you to create credit habits that will lead to a good credit score. You can boost your credit rating by paying attention to these habits.

Create a realistic budget, and pay your bills on schedule. Not just the credit card bill but all bills. Do not apply for credit. Refrain from getting a new card just because of the great welcome offer. You could lose five points each time you apply for credit. Keep an eye on your credit utilization rate. Credit utilization ratio is the difference between the credit that you have used and the credit that you have left. Keep your credit card balance low. Track your spending to be aware of the balance on your credit cards. Once you start using multiple credit cards, a system is vital. Quit obsessing over your score. Your score will increase if you follow the tips listed below. Do not worry about the exact figure. As new information is reported by credit bureaus, your credit score will fluctuate. Be patient and you will see your credit score improve with responsible credit usage.