Is your credit score good? There’s a lot of confusion going around so I’m here to help you understand what’s important and what to focus on.
First, credit scores vary based on the app, lender, or scoring system used to calculate them. They also use different score ranges to determine if your score is considered poor, fair, good, or excellent. In fact, you could be considered having a good score with one app and a fair score on another.
Second, there are two things to know about credit scores: (1) your actual score is based on proprietary scoring systems created by private companies, and (2) the score range where your score falls can vary.
Is Your Credit Score Good or Bad?
There are two scoring systems that are wildly adopted. They are FICO and VantageScore. Both these scoring systems use the 300-850 score range with 300 being the poorest and 850 as excellent. In some instances, you might find scoring systems use ranges that go up to 950 or even 1000.
But for simplicity’s sake, I’ll focus on FICO and VantageScore.
Credit Scores Vary Greatly
Not only will you get a different FICO Score compared to a VantageScore, but you could also get different FICO scores as well. Basically, there isn’t a standardized way to calculate scores. It is a proprietary system that’s just adopted by lenders and accepted by us.
- Your score will vary based on the scoring algorithm used
- Your score will vary based on the credit bureau information used
- Your score will vary based on information lenders prioritize
- Your score will vary from one credit bureau to another
- Your score will vary from one lender to another
Here’s an example: I paid for my FICO score 715 directly from myFICO. Compared that to the FICO score I got at Experian which was 685. Even better compare that to FICO score my credit card offers which are 720. They all are using information from my Experian credit report.
Now, using a few of the free credit score apps, the following are my credit scores:
Credit Karma: 755 (TransUnion VantageScore) and 765 (Equifax VantageScore) – get your free score
Credit Sesame: 735 (Transunion VantageScore)
CreditWise: 730 (Transunion VantageScore)
As you can see the scores aren’t the same but are close to each other. However, a 25 point difference (730 v 755) can mean Good v Excellent credit to lenders.
Again, there isn’t a “one and only” credit score used by lenders or organizations. From the example above, you could pay for your FICO score through myFICO and that score may be different from a score given to you by a creditor (my credit card company) that also uses FICO scores.
Check out the marketplace for dozens of apps offering free credit scores.
Credit Score Good or Bad: Focus on the Range
The important part is knowing where you fall in the credit score range. The range varies on the scoring model used but typically between 300-850. Creditors have also partitioned this range from poor to excellent.
The FICO and VantageScore credit scores use a range of 301 to 850. Within that range, you may fall into different categories from bad to excellent credit.
- Excellent Credit: 750+
- Good Credit: 700-749
- Fair Credit: 650-699
- Poor Credit: 600-649
- Bad Credit: below 600
Generally, anything over 650 is considered good credit and if you’re above 700 you’re entering into a very good to excellent credit range.
The most important thing you can do to impact your credit score is to ensure the information on your reports is accurate. The info in your credit file is what these bureaus and companies used to calculate your score.
Get your truly free credit report through AnnualCreditReport.com and use credit monitoring tools to get visually appealing credit report cards.
If you haven’t checked our credit report and score guide, that’s a great place to start to learn more about credit. You can learn how to monitor your credit, report inaccuracies, and tips to improve your credit score.
Why knowing your credit score matters
It’s good to know where you stand with credit scores before applying for any loans or credit. It’s helpful when applying for a loan and negotiating with lenders. Just keep in mind lenders decide if your score (to them) is good or excellent. Lenders have their own specific underwriting guidelines that determine if a 700 credit score gets the best rate. That’s why it’s more important to have an accurate report and to apply to multiple lenders to get the best offer.
Regardless of the scoring systems used, one thing to note is that the lower your score, the higher the risk that lenders see. Knowing your score and using a monitoring app can keep you informed about what aspects of your credit is causing your scores to be lower than it can be.
So go ahead and check your scores using one of the free score apps found in the marketplace.