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What is a good credit score?

Sept. 19, 2022
9 min read
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A good credit score is something every points and miles enthusiast should strive toward. Not only can a solid credit score make it easier to qualify for great credit card offers, but it can also save you a lot of money along the way.

What is a good credit score?

A good credit score is between 670 and 739. FICO Scores range from 300 to 850. Scores that fall between 300 to 669 are classified as “very poor” or “fair.” Once you reach the 670 to 739 range, however, you cross the threshold into “good” credit score territory. Between 740 to 850, your score is “very good” or “exceptional.”

FICO Scores are the credit score brand used by most lenders.

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These are the five general credit score classifications. However, it’s really up to each lender to set its own criteria when it comes to credit scores. One card issuer might offer you its best rate and terms at around the 720 score mark, while the next might want you to have a 740 score to get that same type of treatment.

Ideally, you should aim for a credit score of 760 or higher. A FICO score of at least 760 should get you the best treatment available from lenders (including mortgages and auto loans). In the credit card world, a 740 score may grant you access to almost any credit card on the market.

What is the highest credit score?

The highest score is 850 for most credit score ranges. However, you don't need to hold your breath to be close to 850 in order to have a good credit score.

Once you earn a very good credit score, you won’t gain much from having an 850 FICO score instead of a 760. It’s like how SPF 100 sunscreen doesn’t work significantly better than SPF 50. A perfect score isn’t necessary.

Still, it’s good to know how your credit score is calculated and how you can improve it. With FICO scores in particular, your credit score is influenced by five categories of information — all of which can be found in your credit report.

Related reading: 5 lesser-known things that affect your credit score

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Credit score factors

Payment history: 35%

The most important information on your credit report has to do with your payment history. This data impacts 35% of your FICO Score.

Any missed payments can potentially damage your score, and even the occasional late payment can be a serious red flag. Other negative information like collection accounts and charge-offs can cause you problems in this category as well.

Paying your bill on time is also an important part of our 10 credit card commandments. If you’re worried about forgetting to make a payment, consider setting up automatic drafts as a backup measure.

Amounts owed: 30%

After payment history, FICO places a big emphasis on the debts you owe. Your credit card utilization rate in particular influences 30% of your FICO Score. Credit utilization describes your credit card limits and balances, and how these figures relate to each other.

Although the term utilization may be unfamiliar to you, the concept is simple enough to grasp. If you owe $2,500 on a card with a $5,000 limit, your utilization ratio is 50%. That is, you’re utilizing half of your credit limit.

Credit scoring models reward users who discipline themselves and maintain low credit card utilization rates. It’s in your best interest to avoid carrying a balance by paying your full credit card balance each month. Following this advice will save you money and protect your credit score at the same time.

FICO

Length of credit history: 15%

While length of credit history is a less significant credit scoring factor, it’s still quite important. As the age of your oldest account and your average age of accounts grows older, your scores may improve. You may need a year or more of credit history to be considered for some premium rewards cards.

Your length of credit history should naturally increase over time. If you have a loved one willing to add you as an authorized user to an older credit card account, this might help you in the length of credit history category too.

Finally, it’s wise to maintain some activity on all of your credit cards. Doing so may help you avoid the risk of having your account closed due to inactivity. A closed credit card will fall off your credit report after 7-10 years (depending on whether it’s negative or positive). Once the account falls off your report, it will no longer count in your average age of credit.

New accounts: 10%

When you apply for new credit, a “hard inquiry” from the credit card company will appear on your credit report. This hard inquiry will factor into your credit score whether you’re approved or not. Hard inquiries stay on your report for up to two years but they only influence your FICO Score for 12 months (if they have any impact at all).

Lenders may see multiple account openings in a short period of time as a warning that you’re desperate to open credit. Yet new accounts are a minor factor in your credit score, worth just 10% of your FICO Score. If you don’t go overboard with too many credit applications in a 12-month span, you should be fine.

It is also important to be aware of rules like Chase’s 5/24. This unofficial rule stops you from opening a new Chase credit card if you’ve opened five or more credit cards with any card issuer in the past 24 months.

Credit mix: 10%

The final credit scoring category deals with the types of accounts that appear on your credit report. Ideally, lenders like to see a mix of credit cards, retail accounts and loans — and a history of managing them well.

However, it’s not important to have one of each. There are plenty of people who don’t have any loans and have no problem being approved for new cards. If you’d like to add an installment loan to your report without going into debt, a credit builder loan may be worth considering.

How to check your credit score

You should check your three credit reports from Experian, TransUnion and Equifax often. If you’re trying to improve your credit and plan to apply for new financing, this is an especially goal to set for yourself.

You can access a free copy of all three reports from AnnualCreditReport.com once every 12 months. There are many other places online where you can check your credit reports and scores free of charge.

Remember, checking your own credit will never hurt your credit score. Be on the lookout for signs of fraud or credit mistakes when you review your reports. If you find anything shady, you can dispute those issues with the credit reporting agencies.

Related reading: How to check your credit score for free

Credit cards for excellent credit scores

Excellent credit scores are a common requirement for some of the most attractive premium rewards cards. Because of their lavish benefits, cards like the Chase Sapphire Reserve® or The Platinum Card® from American Express fall into this category.

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Yet don’t fear. Even if your credit score sits below 700 or you don’t have a score at all, it’s often possible to establish or boost your score in a relatively short period of time. It’s also not as hard to get approved for cards like the Chase Freedom Unlimited or The Amex EveryDay® Credit Card from American Express with a lower credit score. There are many card options available if you haven’t made the jump to a “good” score yet.

The information for the Amex EveryDay Credit Card has been collected independently by The Points Guy. The card details on this page have not been reviewed or provided by the card issuer.

Bottom line

Your good credit score is a solid indicator of whether you’ll be approved for a new credit card but it’s not a guarantee of approval. Even if you have an excellent score, you can still be denied credit.

For example, those with a high credit score as a result of being an authorized user on a parent’s account might have problems getting approved if they have no other established credit.

If you’re just starting to build your own credit, it may be best to begin with one of these starter cards. After six months to a year of having your own credit, other more lucrative cards may become available to you.

Above all, remember that building a good credit score takes time. So, pay your bills on time, keep your statement closing balances low on your credit cards and be smart about opening and closing your accounts. And then a world of rewards cards awaits you.

Additional reporting by Emily Thompson.

Featured image by Getty Images/Hero Images
Editorial disclaimer: Opinions expressed here are the author’s alone, not those of any bank, credit card issuer, airline or hotel chain, and have not been reviewed, approved or otherwise endorsed by any of these entities.

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