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What Is an Excellent Credit Score? | Credit Cards

You might be surprised to hear this, but as of April 2022, the average FICO score was 716. Most FICO scores range from 300 to 850. A FICO score of 716 falls within the “good credit” range, which is from 670 to 739. If your score is above 716, you can consider yourself above the average credit score in the U.S.

So, what is an excellent credit score? The bar for excellence begins before 800, but the number to beat varies depending on which credit score (and which version of that score) is used.

The two most common score types are FICO scores and VantageScores, so let’s take a look at each.

What Is an Excellent Credit Score?

There are many versions of the FICO score, but in general, here’s how the five FICO credit ranges shake out:

  • Exceptional: 800 and above.
  • Very good: 740 to 799.
  • Good: 670 to 739.
  • Fair: 580 to 669.
  • Poor: 579 and lower.

Looking at the breakdown, you might think you need a score of at least 800. You do to be classified as “exceptional,” but you don’t need an 800 FICO score to get the best interest rates for loans and credit cards.

If you have at least a 760 score, according to Informa Research, you qualify for the lowest interest rate that’s available on that day. With an 820 score, you’d get the same interest rate. Maybe you’re not technically exceptional in the eyes of FICO with a 760 score, but who cares? If you still qualify for the best rates, that’s all that matters.

Here are the VantageScore credit ranges:

  • Excellent: 781 to 850.
  • Good: 661 to 780.
  • Fair: 601 to 660.
  • Poor: 500 to 600.
  • Very poor: 300 to 499.

A 750 FICO score is considered a very good score. But a 750 VantageScore is only considered a good score. The factors aren’t weighted exactly the same, so that’s why you can’t make a direct comparison with different types or versions of scores.

What Affects Your Credit Score?

There are the five factors considered in your FICO score.

  • Payment history: 35%.
  • Credit utilization: 30%.
  • Length of credit history: 15%.
  • Credit mix: 10%.
  • New credit: 10%.

As you can see, there’s a heavy emphasis on payment history and credit utilization. Most credit score versions also include these two factors in their scores, but again, they’re weighted differently.

VantageScore doesn’t give percentages for the factors involved in score calculations. Instead, it focuses on how “influential” a category might be.

  • Credit usage, balance and available credit: extremely influential.
  • Credit mix and experience: highly influential.
  • Payment history: moderately influential.
  • New accounts: less influential.
  • Credit history age: less influential.

Why an Excellent Credit Score Matters

An excellent credit score helps you save money. Aside from getting lower-cost loans, you’ll also qualify for the best credit cards – and in some states, for lower insurance premiums.

And in the midst of a financial emergency, such as an expensive home repair, having a great credit score is valuable because it can help you get easier access to a loan with a low interest rate. If you ever get into credit card debt, having a great score helps you get approved for a 0% APR balance transfer card, which allows you to pay off your debt while paying zero interest.

Having great credit can also give you a little peace of mind. You know that should anything go wrong, such as a job loss, you have access to credit cards and loans to help you get through.

How to Find Your Credit Score

Many credit card issuers offer free credit scores with your monthly statement. Some of these are FICO scores, and some are VantageScores. About 90% of lenders use FICO scores to evaluate applicants, but you can still get a good idea of where your credit stands with VantageScores.

There are also apps for free credit scores. Some of these focus on scores, but others cover a range of personal finance activities, such as budgeting and tracking expenses. The bank where you have your checking and savings accounts might also be a source for a free score.

Honestly? You don’t have to look hard to find a free credit score these days!

Improving Your Credit Score

It takes six months of reported account data to generate a FICO score. With VantageScore, if you have at least one month’s worth of credit activity within the last 24 months, you can generate a score.

You don’t get to choose which score is used by a lender, but you do have the power to develop credit habits that can lead to a high credit score, regardless of the type or version that’s used. Pay attention to the following habits to boost your credit score.

  • Maintain a stellar payment history. Set up a realistic budget and pay all of your bills on time. I’m talking about every single bill, not just your credit card bill. A great payment history is the pathway to great credit.
  • Apply for new credit sparingly. Resist the urge to get a new credit card because it has a terrific welcome offer. Each time you apply for a credit card, you could lose up to five points off your score. Be sure you apply for credit only when you actually need a new credit card.
  • Watch your credit utilization ratio. You have a credit utilization ratio, which is the amount of credit you’ve used compared with the amount of credit you have available. Keep your credit card balances under 30% – 10% if you can – and you’ll see an improvement in your score.
  • Stay out of debt. Start tracking your spending so you are always aware of your credit card balance. Once you are using several credit cards, having a system in place is essential. If you don’t know where every dollar is going, you will probably end up in debt.
  • Stop obsessing about your score. Just practice the habits listed here, and your score will improve. But do chill out about the exact number. Your credit score will change as new information is reported to the credit bureaus. So be patient, and responsible credit use will fix your score.

Sarah Goldberg
Sarah Goldberg

Sarah is a seasoned financial market expert with a decade of experience. She's known for her analytical skills, attention to detail, and ability to communicate complex financial concepts. She holds a Bachelor's degree in Finance, is a licensed financial advisor, and enjoys reading and traveling in her free time.

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