What Is a Good Credit Score — and Why Does It Matter?

Your credit score is a three-digit number (usually between 300 and 850) that predicts how likely you are to pay your bills on time. It’s based on your credit history and used by lenders to determine whether to approve your loan — and what interest rate to offer.

But what exactly is a good credit score? That’s where it gets tricky.

There isn’t just one answer. Different lenders use different scoring models, and each may have slightly different cutoffs. However, most use versions of the FICO Score or VantageScore, and here’s how they generally break down:

• Excellent: 760–850

• Good: 700–759

• Fair: 630–699

• Poor: Below 630

According to FICO, the average U.S. credit score is around 695. So if you're above 700, you're already in good territory.

What Affects Your Credit Score?

Your score is based on five key factors:

1. Payment History – Whether you pay bills on time (this carries the most weight).

2. Credit Utilization – How much of your available credit you’re using.

3. Length of Credit History – Older accounts help boost your score.

4. Credit Mix – A mix of credit cards, loans, and other types of credit is ideal.

5. New Credit Inquiries – Too many applications in a short time can lower your score.

Your credit score does not consider personal info like your age, income, employment history, or whether you pay rent or utility bills on time (unless those payments are reported to the bureaus).

Why a Good Credit Score Matters

A good credit score opens doors. It can help you:

• Qualify for loans and credit cards more easily

• Get lower interest rates and higher credit limits

• Pay less over time in borrowing costs

• Avoid large deposits for things like utilities, cell phones, or apartment rentals

• Improve your chances during a job background check (for roles involving money or sensitive data)

How to Build and Maintain a Good Score

Here are five practical steps:

1. Pay bills on time – Set reminders or autopay to avoid late payments.

2. Keep credit usage low – Use less than 30% of your available credit.

3. Don’t open too many accounts at once – Each hard inquiry can lower your score slightly.

4. Keep older accounts open – Long credit history helps.

5. Check your credit reports – Look for errors and dispute anything inaccurate.

The Bottom Line

A good credit score reflects consistent, responsible credit use. It can save you money, open up financial opportunities, and make everyday life — from buying a home to renting an apartment — easier.

By paying your bills on time, keeping balances low, and monitoring your credit reports, you can build and maintain strong credit over time.