You know that your credit score impacts your ability to borrow and that it’s important to build it up — but what do different credit score ranges mean?
Credit scores run between 300 and 850 points — so there’s a lot of room for interpretation on what to aim for. To start with, it helps to know what the average score is. The problem is that figure differs a bit depending on which method is used to calculate the score.
The two most popular credit scoring models, FICO 8 and VantageScore 3.0, list average scores from 2018 as 704 and680, respectively. FICO 8 and VantageScore 3.0 share many scoring criteria, but they don’t weigh individual elements the same.
So, to look at this from a different angle: at what point is your score low enough to limit your borrowing options? Though different models,FICO 8 and VantageScore 3.0 agree that if your score is below 600, you’ll likely contend with higher interest rates and increased deposits, and you may have trouble getting approved for credit.
On the opposite end, those with scores of 800 or greater are considered “superprime” and have access to better rates and deals.
The following is a broad breakdown of how your credit score is categorized:
- Excellent — 720-850
- Good — 690-719
- Fair — 630-689
- Bad — 300-629
The good news is that credit scores don’t determine creditdecisions on their own. Lenders want to know you can manage your debt and makepunctual payments. A credit score is just a piece of that larger picture.
If you’re thinking of ways to improve your score, the factors that have the most impact in both models are keeping the amount of your credit limit that you use low (30% or less) and making payments on time.
You can always check on your credit report to see how you’re doing — just visit:
For more resources on credit scores, go to: