Credit Score Ranges Explained

Although the specifics can get very complex, there are a few basic rules you should learn about how credit scores work.

No matter where or how you obtain your score, the ranges are typically separated into the following categories:

  • 300 - 629: Poor
  • 630 - 689: Fair or Average
  • 690 - 719: Good
  • 720 +: Excellent

Keep in mind these are rough ranges, and every lender will have their own approach to how they view your score.

Lenders usually look to FICO to obtain your score, even though there are a variety of options they could use. (The average score is about 700 for FICO for fast reference.)

However, an automobile or credit card company might follow a different scoring model, ranging from 250 to 900.

This can be a wake-up call for people who may have been judging their score based on a different system.

VantageScore, using a system ranging from 300 to 850 and an average score of 675, is another popular credit scoring tool that's starting to compete with FICO.

How Do You Stack Up?

It helps to know where your score is in relationship to the rest of the population.

See how the scores breakdown for both FICO and VantageScore:

FICO

Score Percentage
499 (or below) 4.7%
500s 15.3%
600s 23.2%
700s 36.1%
800 (and up) 20.7%

VantageScore

Score Percentage
499 (or below) 4.4%
500s 21.6%
600s 27.5%
700s 27.1%
800 (and up) 15.3%

Scores are typically similar across both systems, but not the same.

For example, you may have a 735 FICO score and a 700 VantageScore.

These types of differences are common, and don't indicate a problem.

If the scores are wildly different though, it may indicate either an error or a discovery on the part of either algorithm.

What Does The Number Mean?

A credit score is really just a number until you go to open up a credit card, buy a car, or take out a loan for a home.

The lower your score is, the more restrictions are placed on your account.

You may not be able to get a credit card, or you may only qualify for one with extremely high interest rates.

Some people even pay more for their car insurance and for basic utilities.

People with higher credit scores pay less for practically everything.

They're given the best rates because they're statistically more likely to pay back their debt in full.

Those with scores higher than 750 or above may even be able to get 0% interest on a credit card or other financing.

It's important to understand how improving your credit score works out to higher costs savings in the long-run.

How To Get Your Score

Getting your score might be easier than you think, though again, you'll need to consider the source.

Your lender may have their own methods of investigation, but comparing scores from the three major credit reporting agencies like Experian, TransUnion, and Equifax is a great place to start.

Websites like CreditKarma can also provide you with an estimate of your personal free credit score whenever you choose to check it.

It may not be perfectly accurate, but it will give you a general idea of your status.

Not only is checking your score the smart thing to do when it comes to your financial health, it's also a good habit if you want to catch identity theft early on.

Tracking Credit Score Progress

If it comes to just tracking your progress though, you should try to mark your improvements based on just one source (e.g., only use FICO.)

Trying to do the math between the different scales (e.g., 250 - 900 or 300 - 850) can make things confusing.

Assuming that all the credit bureaus have complete and correct data, your scale will usually move up and down across all algorithms in a relative way.

And remember: It’s normal for your score to go up and down quickly.

Every financial move you make can affect your score, and it will adjust and readjust as all of your activity settles into the big picture.

When Your Credit Score Isn’t Enough

While a credit score is important to lenders, it's not the only thing they care about.

An excellent credit score doesn't always mean approval or fantastic rates.

Lenders are most concerned with how likely you are to pay back the money on time.

So if you have a limited income and lots of existing debt, then you may not be able to get the deals you're looking for (even if your credit score is stellar.)

Strive to keep your debt utilization on the low side, between 10 - 30% of your total available credit, and maintain a debt to income ratio of under 36% to preserve your credit score and avoid credit problems down the line.

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