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Bankrate has partnerships with issuers including, but not limited to, American Express, Bank of America, Capital One, Chase, Citi and Discover. SHARE: MoMo Productions/Getty Images May 27, 2022 Checkmark Bankrate logo How is this page expert verified? At Bankrate, we take the accuracy of our content seriously. "Expert verified" means that our Financial Review Board thoroughly evaluated the article for accuracy and clarity. The Review Board comprises a panel of financial experts whose objective is to ensure that our content is always objective and balanced. Their reviews hold us accountable for publishing high-quality and trustworthy content. Nicole Dieker has been a full-time freelance writer since 2012—and a personal finance enthusiast since 2004, when she graduated from college and, looking for financial guidance, found a battered copy of Your Money or Your Life at the public library. In addition to writing for Bankrate, her work has appeared on CreditCards.com, Vox, Lifehacker, Popular Science, The Penny Hoarder, The Simple Dollar and NBC News. Dieker spent five years as writer and editor for The Billfold, a personal finance blog where people had honest conversations about money. Dieker also teaches writing, freelancing and publishing classes and works one-on-one with authors as a developmental editor and copyeditor. Cathleen's stories on design, travel and business have appeared in dozens of publications including the Washington Post, Town & Country, Wall Street Journal, Marie Claire, Fodor’s Travel, Departures and The Writer. Bankrate logo The Bankrate promise
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At Bankrate, we have a mission to demystify the credit cards industry — regardless or where you are in your journey — and make it one you can navigate with confidence. Our team is full of a diverse range of experts from credit card pros to data analysts and, most importantly, people who shop for credit cards just like you. With this combination of expertise and perspectives, we keep close tabs on the credit card industry year-round to: Meet you wherever you are in your credit card journey to guide your information search and help you understand your options. Consistently provide up-to-date, reliable market information so you're well-equipped to make confident decisions. Reduce industry jargon so you get the clearest form of information possible, so you can make the right decision for you. At Bankrate, we focus on the points consumers care about most: rewards, welcome offers and bonuses, APR, and overall customer experience. Any issuers discussed on our site are vetted based on the value they provide to consumers at each of these levels. At each step of the way, we fact-check ourselves to prioritize accuracy so we can continue to be here for your every next. Bankrate logo Editorial integrity
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You have money questions. Bankrate has answers. Our experts have been helping you master your money for over four decades. We continually strive to provide consumers with the expert advice and tools needed to succeed throughout life’s financial journey. Bankrate follows a strict , so you can trust that our content is honest and accurate. Our award-winning editors and reporters create honest and accurate content to help you make the right financial decisions. The content created by our editorial staff is objective, factual, and not influenced by our advertisers. We’re transparent about how we are able to bring quality content, competitive rates, and useful tools to you by explaining how we make money. Bankrate.com is an independent, advertising-supported publisher and comparison service. We are compensated in exchange for placement of sponsored products and, services, or by you clicking on certain links posted on our site. Therefore, this compensation may impact how, where and in what order products appear within listing categories. Other factors, such as our own proprietary website rules and whether a product is offered in your area or at your self-selected credit score range can also impact how and where products appear on this site. While we strive to provide a wide range offers, Bankrate does not include information about every financial or credit product or service. Today’s economy runs on credit. If you want to get a mortgage for a house or a student loan to pay for college—or if you just want to charge your lunch on a credit card—you’re going to need a lender to extend you a line of credit. You’ll also need to be worthy of that line of credit. Your creditworthiness is defined by your three-digit credit score and is the key to your financial life. Good credit can be the make-or-break detail that determines whether you get a , or . Bad credit, on the other hand, will make it difficult to get a credit card with a low interest rate and more expensive to borrow money for any purpose. Even if you’re not in the market for a loan, good credit can have a major impact. Landlords, insurers and employers frequently use credit information as a litmus test to see if the people they’re dealing with are reliable and responsible. Bad credit can suggest you’re a risky bet. While your credit technically only shows the details of how you deal with debt, some will extrapolate the characteristics from your financial life to other situations. can signify that your financial situation—and the rest of your life—is on the right track. This means your credit score can affect your insurance rates, what apartment you’ll be approved for, and perhaps even whether you get that new job. But what is a good credit score? Understanding why good credit is important and how to build a good credit score will help you take advantage of the benefits of good credit, so let’s take a close look at what you need to do to get your score within the “good credit” range. What is a good credit score
What is considered a good credit score? According to the , credit scores fall into five distinct categories: Poor credit: 300-579 Fair credit: 580-669 Good credit: 670-739 Very good credit: 740-799 Excellent credit: 800-850 The good credit score range includes all FICO credit scores between 670 and 739. However, many people consider “good credit” to include any FICO score higher than 670. This means if you have or , you also have good credit by default. If your FICO credit score is higher than 670, you not only have good credit but have also moved your credit from the “subprime” category to the “prime” category. People with good credit are more likely to benefit from the —which means that you might pay less interest on your credit cards, mortgages and loans. Benefits of good credit
There are many benefits to having good credit. Landlords are more likely to rent you an apartment, for example. If you’re job-hunting, your employer may review your credit as part of the hiring process. But the biggest benefits of good credit are financial. Here are three ways in which good credit can make your life easier and more affordable. Easier credit approval
If you have good credit, banks and lenders are more likely to approve your credit applications. This means when you apply for credit cards, loans or mortgages, you’ll be and may spend less time waiting to hear the results of your application. Lower interest rates
In addition to having higher credit approval rates, people with good credit are often offered . Paying less interest on your debt can save you a lot of money over time, which is why building your credit score is one of the smartest financial moves you can make. Better loan terms
People with good credit are often given better loan terms than people with poor credit. You might receive a on a credit card, for example, or you might be able to take advantage of a low fixed-rate mortgage. How to get good credit
If you want a good credit score, you need to understand and . Your FICO credit score is made up of the following five factors: Payment history: 35 percent Credit utilization: 30 percent Length of credit history: 15 percent Credit mix: 10 percent Recent credit inquiries: 10 percent If you want to get your credit score into the good credit score range, you need to improve your credit habits as they relate to those five factors. Payment history
Since payment history makes up 35 percent of your credit score, try to make all of your credit card payments on time, every time. can have serious negative effects on your credit score, especially if you don’t make up the missed payment as quickly as possible. Credit utilization
Your reflects how much of your you’re currently using. If you want good credit, try to keep your credit utilization below 30 percent of your available credit. If you have $10,000 in available credit, for example, try not to let your total credit card balances exceed $3,000. If your credit card balances go past that 30 percent mark, pay them off as quickly as possible. That way, those high balances will have less of an opportunity to lower your credit score. Length of credit history
Lenders like to see that you can manage credit accounts responsibly over a long period of time. This is why it’s a , even if you’re no longer using them. Your credit report only tracks active credit accounts, and when you shut down your oldest credit accounts, you shorten your credit history. If you want to build good credit, keep your credit cards open. Credit mix
The different types of credit accounts under your name account for 10 percent of your credit score. If you have both (like credit cards) and (like a mortgage or a car loan), your credit score might increase by a few points. However, you can still build and maintain a good credit score even if you only have credit cards, so don’t worry if you don’t have much of a credit mix yet. Recent credit inquiries
Every time you apply for a new line of credit, the bank or lender conducts an inquiry into your credit history. Having too many on your account can negatively affect your credit score because applying for a lot of new credit at once is a risky financial behavior. If you’re trying to build good credit, try to between credit card applications. It’s also a good idea to regularly and keep tabs on your credit report. Millions of Americans have errors on their credit reports, and those errors could be inadvertently hurting your credit score. So take a close look at your Equifax, Experian and TransUnion credit reports and . How to maintain a good credit score
Building a good credit score is a start, but maintaining it will help you continue to take advantage of the benefits of good credit. How do you maintain good credit? Essentially, you keep practicing the responsible credit habits that helped you earn your good credit score in the first place. Pay every bill on time, all the time. Keep your credit utilization ratio low, and avoid using more than 30 percent of your available credit. Don’t close old credit accounts. Instead, use your old credit cards as proof of a long and responsible credit history. Keeping your credit score high is often easier than building credit, but don’t let your guard down. If you fail to pay your bills on time or charge balances you can’t pay off, you could see your score start to slip. The bottom line
What is a good credit score If your FICO score is over 670, you have good credit. There are many benefits of good credit, including access to better credit cards and lower interest rates, so it’s important to understand how might be helping or hurting your credit score. Once you know how to get a good credit score, you’ll be able to take advantage of all of the positive financial opportunities associated with good credit. These include access to , which offer everything from cash back rewards to . SHARE: Nicole Dieker has been a full-time freelance writer since 2012—and a personal finance enthusiast since 2004, when she graduated from college and, looking for financial guidance, found a battered copy of Your Money or Your Life at the public library. In addition to writing for Bankrate, her work has appeared on CreditCards.com, Vox, Lifehacker, Popular Science, The Penny Hoarder, The Simple Dollar and NBC News. Dieker spent five years as writer and editor for The Billfold, a personal finance blog where people had honest conversations about money. Dieker also teaches writing, freelancing and publishing classes and works one-on-one with authors as a developmental editor and copyeditor. Cathleen's stories on design, travel and business have appeared in dozens of publications including the Washington Post, Town & Country, Wall Street Journal, Marie Claire, Fodor’s Travel, Departures and The Writer. Related Articles