What is a good credit score?

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With most credit scores, the higher the credit score, the better it is. However, a "good" credit score can be difficult to define since lenders have differing perspectives on what they think is a good credit score. Banks and financial institutions determine their best rates based on their own assessment of their customers. As such, definitions will change from lender to lender and industry to industry.

The recent economic turmoil provides a perfect illustration of a changing definition. Back in the housing boom, a credit score of 680 was often considered "good" enough for a mortgage at the best rate or near the best rate. Today, homeowners will often need a credit score of 720 up to 750 to qualify for some loans.

In general, good credit scores are based on how much risk a lender is willing to take in the form of loans. On an aggregate level here are some general views on credit score ranges and how they are perceived by most lenders. Keep in mind it always completely up to the lender.

Credit Grade	Credit Score	Generalized Implications
Poor	300-549	Not considered credit worthy. Will not qualify for most loans unless it is co-signed or secured.
Fair	550-639	Considered sub-prime by many lenders. Will see limited credit card and auto loan approval. No home loans. High interest rates.
Good	640-719	Considered a good credit score in most industries. Will be approved for most credit cards, most auto loans, and some home loans. Will not be at the best interest rate.
Excellent	720-850	Considered the highest credit quality. Should qualify for the majority for loans. With credit crunch some lenders require 750+ now to receive best pricing.

You can also view the complete distribution of credit scores across the US population on Credit Karma.

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Comments

(12 Total Comments)

the credit folks are working a monoply on people to charge them high interest rates, it will come back on them one of these days when people get fed up and pull all their money out of the banks and rip up their credit cards.

I think the feds sould step in and place more regulations these crooks for the wait they scam people out of their hard earned money."

letsmakeadea at 6:58 pm Mar 8

Why is my credit score 724 here and 695 on the truecredit website for transunion? And why is a 724 here considered a B, where a 695 is considered a D? If I needed to get a bank loan, would they check this website or truecredit? How do I know which credit score is right?

Thanks"

mjb100 at 8:04 pm Feb 21

As of Jan, 2010, TrueCredit moved to the Vantage Score system which differs from our system. Both score are right although, there is seems to be a very large discrepancy in the relative range. Are you sure both scores are the most recent?

CK Moderator

On your listing as to what the credit scores mean, whether they are fair or good ect., you have 640-719 listed as good. Yet when I look at my credit score which is 699, you say that it is fair. So why do you say it is fair and not good?"

joefrogcool at 3:56 pm Feb 20

Ratings are constantly in flux based on lenders and the economy. We will review our ratings to ensure more consistency in this credit environment.

CK Moderator

Are the credit scores accurate?"

MEGS1965 at 6:40 pm Jan 30

We currently pull credit scores from TransUnion

CK Moderator

I viewing my credit history on this site it states 15 years of history. I have maintained open accounts for 35 years. Credit Karma rates me as average. This appears to be a deficiency. Last month I had a 795 score, this month 794. Hard to figure out..."

foobar2 at 6:43 am Jan 26

That is an excellent score. Based on your comment, perhaps you have an average number of open accounts.

CK Moderator

seems to me that paying down ones own debt will bring down THE score. i own my truck and my bikes,used cash. payed off my house this year, 13yrs early. and have money in my checking/savings/cd fund and owe no one nothing. and alls i get is a score of 686 or FAIR. and to think of all the money i saved just paying off my house. their game and rules i guess. i'll stick with cash and just keep buying rare gold coins, worked for me."

hpsteam at 12:23 pm Dec 12

Do you happen to know why if the exact same information is included in calculating credit scores? For example, the exact same data is reported on all three of my reports, but the range in scores varies by more than 150 pts. For example, my Experian score is 760, the Equifax is 695, and the TransUnion score is 617. My oldest account is 10+ yrs old, and except for one acct which shows as delinquent (and which I am disputing) the remaining 11 accounts are all in good standing and have been for more than 7 yrs. In addition, I am using about 40% of my total available credit. Each time I apply for credit and the creditor checks TransUnion, my application is rejected but if the creditor checks Experian or Equifax, I don't seem to have a problem."

KrysBee at 2:17 pm Nov 3

That is strange. Are you getting the scores from the same source? In my experience, there has to be something different with the data. I don't recall ever seeing a 143 point different with factual data.

CK Moderator

wow! why so much descrepency?"

munisa at 7:04 pm Jan 1

Hate to rain on everybody ,but recently i went on to experians site and they no longer use fair isac scoreing system.I have a 740 score with them and they only rate me as a low c rating and anything under 730 is rated as a d .And im reading that transunion and equifax are getting ready to use the same system as experian if so a 740 score is no longer good . they claim a 840 to 990 is good.In all sounds like a big scam to me to keep loan rates high."

turbosb2 at 9:08 pm Oct 16

That is the Vantage score. It is not a "rip" just another system with another scale.

CK Moderator

Either way anniebaby your credit score of 740 should soon be at 750 or better which will qualify you across the board!"

Waddy at 1:37 pm Sep 4

unless they drop your score by lowering your avilable credit line to keep you paying high interest rates."

They love doing that and the feds don't care.

we need to vote people in who care about the little person.

letsmakeadea at 7:02 pm Mar 8

Under the "How Lenders View Your Credit" my score (740) falls in the "Good Category." On the "What is a good credit score" question, it's considered "Excellent." Why the difference? Thanks."

anniebaby at 11:27 am Jun 8