Chapter 04: What Are the Credit Score Ranges?

Read the Article

Your credit score can heavily influence your financial life. You need a good credit score to buy a car, get a good down payment on a house, and qualify for a loan. A high credit score gives you access to more favorable loans and more credit products at lower rates. And a low credit score means you’ll be subject to higher interest rates and you’ll have a harder time getting approved for loans.

But what are the credit score ranges?

In Chapter 4 of our credit score series, we’ll be answering questions like “what is the credit score scale?” and “what are the credit score ranges and what do they mean?” It’s important to be aware of the credit score ranges so you can figure out where you land. Continue reading to learn more about the credit score scale and why it’s important. You can also use the links below to quickly navigate the post.

Overview of Credit Score Basics

In the previous chapters in our credit score series, we went over some of the credit score basics, like what your credit score means, why you need a credit score, factors that affect your credit score, and more.

Your credit score is an important aspect of your financial health and determines your creditworthiness. You need a credit score to be able to do anything from buying a car to qualifying for a home loan. There are various factors that affect your credit score, like your payment history, the type of credit you have open, and your credit utilization ratio. 

It’s important to have an understanding of the credit score basics before continuing on with this chapter. So if you need to, you can go back and read Chapters 1 through 3 for a more in-depth look at the fundamentals.

What Is a Credit Score Range?

Now that we’ve given you a refresh on the credit score basics, let’s get down to the topic at hand–answering the question “what are the credit score ranges?”.

A credit score range applies to the span of numbers your credit score can fall into. Credit score ranges have an upper and lower limit. A credit score can range between 300 and 850.

Your credit score range is very important. A good credit score can get you low interest rates and make getting approval on loans much easier, so you want to aim for a credit score on the higher end of the range.

There are various side effects of a bad credit score, such as:

  • You can be subject to higher interest rates
  • Your loan applications might not be approved for loans
  • You may be subject to higher insurance premiums
  • You may have a harder time finding housing
  • You  may not be able to get certain jobs

Note that creditors create their own guidelines and set their own standards for what scores they’ll accept.

So now that you know how to raise your credit score, you might be wondering, “what credit score do you start with?”. You don’t just start accumulating credit once you turn 18. You actually have to start building your credit, which you can do by:

  • Getting your first credit card
  • Becoming an authorized user on a parent’s account
  • Taking out a student loan
  • Continuing to manage your credit wisely

If you’re able to handle your credit cards and loans responsibly, a high credit score should be within reach before too long.

What Are the Levels of Credit Scores?

Credit score ranges can also be expressed as levels which have their own specific category names. So, what are the levels of credit scores? That depends on which credit score model you’re looking at. The two main models are the FICO score and VantageScore, which we’ll break down below.

The highest credit score you can have is on most scales is 850, but that doesn’t mean you need that highest score to be in good standing with your credit.

As of last year’s report, the average FICO score was 716. That said, the higher you can get your score, the better off you’ll be when it comes to qualifying for loans.

What Is the Credit Score Scale for FICO?

Your FICO score is based on the information in your credit report and it tells lenders how likely you are to repay borrowed money. Most lenders will look at your FICO score to determine whether or not to loan you money. Your FICO score measures:

  • How long you’ve had credit
  • How much of your available credit is being used
  • If you make payments on time
  • If you have a mix of different types of credit open
  • How many new lines of credit you have

The credit score scale for FICO looks like:

  • Poor: <580
  • Fair: 580-699
  • Good: 670-739
  • Very Good: 740-799
  • Exceptional: 800+

What Are the Credit Score Ranges for VantageScore?

VantageScore continuously innovates and improves their scoring system, so it’s important to check the current model. VantageScore looks at:

  • Your available credit
  • Your balance
  • New credit lines  you’ve opened
  • Your credit utilization
  • The age and mix of your credit
  • Your payment history

VantageScore has the same credit score scale than FICO does, which is the 300 to 850 scale. The credit score breakdown is as follows:

  • Very poor: 300 to 499
  • Poor: 500 to 600
  • Fair: 601 to 660
  • Good: 661 to 780
  • Excellent: 781 to 850

What Factors Affect Your Credit Score?

There are various factors that can affect your credit score. It’s important to be aware of these factors so that you can improve your score if need be. Some of the factors that can affect your credit score include:

  • Payment history: If you continuously pay your bills late, it’s going to negatively impact your credit score. Credit agencies check to make sure you’re paying your bills on time, or else they have cause to worry that you might make payments late or miss them altogether.
  • Age of credit and type of credit: This indicates how long you’ve had credit and how prompt you are at paying off your debt. If you always pay off your loans on time, credit agencies will see this as a positive indication for future loans. Having a mix of credit accounts can also improve your credit score.
  • Credit utilization ratio: Your credit utilization ratio is the ratio of your credit card balance to your available credit limits. You should aim to have a low credit utilization ratio, as that indicates that you’re more likely to repay your debts.
  • Total balances and debt: The less debt you owe, the higher your credit score will be. This isn’t as influential as the above factors, but it can still impact your credit score. If you already have a lot of debt, it’s unlikely that you’ll be able to take on new debt, which can negatively affect your credit score.
  • Recent credit inquiries: There are two types of credit inquiries: soft inquiries and hard inquiries.
    • Soft inquiries are when you or someone you know checks your credit report. There is no effect of checking your credit score in this way.
    • Hard inquiries are when you request your credit score for the purpose of applying for new credit. This type of inquiry can have a negative affect on your credit score.

It’s important to keep these factors in mind when you’re using lines of credit.

How Can You Improve Your Credit Score

Unhappy with the credit score range you fall in? Fortunately, there are many ways you can raise your credit score. Typically, building good credit will take time and it’s not something you can just accomplish overnight. But there are a couple of ways you can quickly boost your credit score.

If you implement these good credit habits now and remain consistent, you should see your credit score start to improve over the course of several months:

  • Pay your bills on time: Your payment history has the biggest impact on your credit score. Enroll in automatic payments so you’ll never miss a bill payment. As long as you continue to pay your bills on time, your credit score should gradually increase.
  • Pay down your credit card balances: Try to minimize the amount of debt you owe compared to the credit that’s available to you. This is called your debt to credit ratio, and you want it to be as low as possible to increase your credit score.
  • Check your credit reports regularly: It’s important to regularly check your credit reports so you can quickly catch any incorrect information that might be a sign of fraudulent activity. This incorrect information can cause you to have a lower credit score even if it’s not something you did. The more often you check your credit references, the quicker you can catch these mistakes. You can get a free credit score report once a year.
  • Become an authorized user: If you don’t have a strong credit history, it might be a good idea to build your credit by becoming an authorized user on a parent’s account– assuming they have good credit.
  • Increase your credit card limit: A credit limit increase will decrease your debt to credit ratio, which can help to improve your credit score–as long as you don’t start spending more.

Building good credit habits now can only benefit you in the long run.

What Are the Credit Score Ranges?: Key Takeaways

  • What do credit scores range from? Your credit score can range between 300 and 850
  • There are a couple of different credit score models that are used, but the two most common in the U.S. are FICO and VantageScore.
  • There are various factors that can affect your credit score, such as: payment history, age of credit and type of credit, credit utilization ratio, total balances and debt, and recent credit inquiries

Your Credit Score Range Is a Critical Aspect of Your Finances

Understanding your credit score is an important aspect of your finances. Having a good credit score can help you get better interest rates on loans and get the best credit card rewards. It can even help you land a job or qualify for an apartment!

After reading this chapter from start to finish, you should have a better understanding of what the credit score ranges are, how they work, and of why your credit score range is so important. In Chapter 5, we’ll cover what credit score you start with and why that’s the case.


Written by Mint

Mint is passionate about helping you to achieve financial goals through education and with powerful tools, personalized insights, and much more. More from Mint


FICO 1, 2 | VantageScore 1, 2, 3