Your credit score is one of the most important numbers in your financial life, yet most people are not sure exactly what a good score looks like, how it is calculated, or what they need to do to get there. This guide covers the credit score ranges, what lenders actually look for, and the specific steps you can take to improve your score.
Credit Score Ranges Explained
Most lenders use the FICO score, which ranges from 300 to 850. Here is how the ranges break down:
- 800 to 850 — Exceptional: You will qualify for the best interest rates available. Lenders consider you extremely low-risk.
- 740 to 799 — Very Good: You qualify for nearly all loans and credit cards at competitive rates. A score in this range is excellent for most financial purposes.
- 670 to 739 — Good: This is the range most lenders consider “good.” You will qualify for most products, though not always at the best rates.
- 580 to 669 — Fair: Approval is possible for many products, but interest rates will be higher and some lenders may decline your application.
- 300 to 579 — Poor: Access to credit is limited. You may need a secured card or credit-builder loan to start improving your score.
The average FICO score in the United States is around 714, which falls in the “good” range. A score of 740 or above puts you in a strong position for the best mortgage rates and premium credit card approvals.
How Your Credit Score Is Calculated
FICO scores are built from five categories, each weighted differently:
Payment History (35%)
This is the single biggest factor. Every on-time payment strengthens your score; every missed payment hurts it. A payment that is 30 or more days late is reported to the credit bureaus and can drop your score significantly — sometimes by 100 points or more. Payments that are 90 or 120 days late cause even more damage and stay on your report for seven years.
Amounts Owed / Credit Utilization (30%)
Credit utilization measures how much of your available revolving credit you are using. If you have a $10,000 credit limit across all your cards and carry a $3,000 balance, your utilization rate is 30%. Lenders prefer to see utilization below 30%, and scores tend to be highest when utilization is below 10%.
Length of Credit History (15%)
Older accounts and a longer average account age work in your favor. Closing an old card can shorten your average credit age and hurt your score, even if the card has a zero balance.
Credit Mix (10%)
Having a mix of credit types — revolving credit like credit cards and installment loans like auto loans or mortgages — shows lenders you can manage different kinds of debt. You do not need every type, but a healthy mix helps.
New Credit / Hard Inquiries (10%)
Every time you apply for new credit, a hard inquiry is added to your report. Each inquiry causes a small, temporary dip in your score — typically 5 to 10 points. Multiple inquiries within a short period can add up, though rate-shopping for mortgages or auto loans is treated as a single inquiry if done within a 14 to 45 day window.
What Lenders Actually Look At
Your credit score is the headline number, but lenders often look deeper. When you apply for a mortgage, for example, the lender pulls all three bureau scores (Equifax, Experian, TransUnion) and uses the middle score. They also look at:
- Your debt-to-income ratio (monthly debt payments divided by gross monthly income)
- The length of your employment history
- How recently you opened new accounts
- The presence of any derogatory marks — bankruptcies, foreclosures, or collections
A 740 score with a 45% debt-to-income ratio may get a worse rate than a 720 score with a 25% debt-to-income ratio. The score matters, but it is one piece of the picture.
How to Get a Good Credit Score
Pay Every Bill on Time
Payment history is 35% of your score. Set up autopay for at least the minimum payment on every account so you never miss a due date. If you have a late payment on record, its impact decreases over time — recent history matters more than old history.
Keep Utilization Low
If your balances are high relative to your limits, pay them down. This is the fastest way to improve your score because credit utilization is updated every month when your statement closes. Paying down a maxed-out card can raise your score by 50 to 100 points within 30 to 60 days.
Do Not Close Old Accounts
Unless an old card has an annual fee you cannot justify, keep it open. Closing it removes its credit limit from your total available credit, which increases your utilization rate, and removes its age from your average account age.
Limit New Applications
Only apply for new credit when you genuinely need it. Each hard inquiry causes a small dip, and opening several new accounts in a short period looks risky to lenders. If you are planning to apply for a mortgage, avoid opening any new credit accounts in the six to twelve months beforehand.
Check Your Credit Report for Errors
About one in five consumers has an error on their credit report. You can get free weekly reports from all three bureaus at AnnualCreditReport.com. Review them for accounts you do not recognize, incorrect balances, or payments marked late that you paid on time. Disputing and correcting errors can raise your score quickly.
How Long Does It Take to Build Good Credit?
If you are starting from scratch, it typically takes six months of credit activity before FICO can generate a score for you. From there, moving from a fair score to a good score can take one to two years of consistent on-time payments and low utilization. Moving from good to exceptional (750+) often takes several years, primarily because credit age is a factor you cannot rush.
If you have had negative marks like a bankruptcy or collection account, recovery takes longer — but scores improve steadily as negative items age and as you build positive history on top of them.
Bottom Line
A good credit score in 2026 means 670 or above for basic access to credit, and 740 or above for the best rates on mortgages, auto loans, and premium credit cards. The formula is simple: pay on time, keep balances low, do not close old accounts, and limit new applications. Your score will improve steadily if you follow those principles consistently over time.