What is a good FICO score?

What is a good FICO score?

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In today’s world, your financial health is often distilled into a single number: your credit score. Among the various credit scoring models, the FICO score stands out as the gold standard, widely used by lenders, banks, and financial institutions to assess your creditworthiness. But what exactly is a FICO score, and more importantly, what qualifies as a “good” one? Whether you’re applying for a mortgage, a car loan, or even a new credit card, understanding your FICO score—and what it means to have a good one—can open doors to better opportunities or, conversely, signal areas for improvement. Let’s dive into the details.

What is a FICO Score?

The FICO score, developed by the Fair Isaac Corporation (hence the acronym FICO), is a three-digit number ranging from 300 to 850 that reflects your credit risk based on your credit history. It’s essentially a snapshot of how responsibly you’ve managed credit in the past, and it predicts how likely you are to repay borrowed money on time. Lenders use this score to decide whether to approve your loan or credit application and what interest rate to offer you.

The FICO score is calculated using five key factors, each weighted differently:

  1. Payment History (35%): Have you paid your bills on time? Late payments, defaults, or bankruptcies can drag this down.
  2. Credit Utilization (30%): How much of your available credit are you using? This is the ratio of your current credit card balances to your credit limits.
  3. Length of Credit History (15%): How long have you been using credit? Older accounts generally help your score.
  4. Types of Credit (10%): Do you have a mix of credit types, like credit cards, mortgages, or auto loans? Diversity can boost your score.
  5. New Credit (10%): Have you recently opened multiple new accounts? Too many inquiries or new accounts in a short time can lower your score.

Your FICO score evolves over time as your financial habits change, and it’s updated regularly by the three major credit bureaus—Equifax, Experian, and TransUnion—based on the information creditors report.

The FICO Score Ranges

Not all FICO scores are created equal. The range of 300 to 850 is divided into categories that help lenders quickly assess your risk level. Here’s how the ranges typically break down:

  • Exceptional: 800–850
  • Very Good: 740–799
  • Good: 670–739
  • Fair: 580–669
  • Poor: 300–579

So, what’s considered a “good” FICO score? According to this scale, a score between 670 and 739 falls into the “good” category. But context matters—whether a score is “good enough” depends on your financial goals, the type of credit you’re seeking, and even the lender’s standards. Let’s explore what a good FICO score means in practical terms.

Why Does a Good FICO Score Matter?

A good FICO score isn’t just a badge of honor; it has real-world implications. Here’s why it’s worth striving for:

  1. Loan Approval: Lenders are more likely to approve your application if your score is in the good range or higher. A score below 670 might raise red flags, leading to denials or stricter terms.
  2. Lower Interest Rates: The higher your score, the lower the interest rate you’re likely to get. For example, on a $200,000, 30-year mortgage, a borrower with a 760 score might secure a 3.5% interest rate, while someone with a 660 score might pay 4.5%. Over 30 years, that 1% difference could cost tens of thousands of dollars.
  3. Better Credit Card Offers: A good score can unlock access to premium credit cards with rewards, cashback, or lower annual fees.
  4. Renting and Utilities: Landlords and utility companies often check credit scores to gauge reliability. A good score can make renting an apartment or setting up services easier and cheaper (e.g., avoiding deposits).
  5. Employment and Insurance: Some employers and insurers use credit scores as part of their evaluation process, especially for roles involving financial responsibility.

In short, a good FICO score can save you money, reduce stress, and expand your options. But what does “good” look like in practice, and how does it compare to other ranges?

Breaking Down the “Good” Range: 670–739

A FICO score between 670 and 739 is solid middle ground. It signals to lenders that you’re a reliable borrower—not perfect, but far from risky. Here’s what this range typically means:

  • You Pay Bills on Time (Mostly): You’ve likely avoided major delinquencies, though an occasional late payment might have slipped through.
  • You Use Credit Responsibly: Your credit utilization is probably under control—ideally below 30%—showing you’re not maxing out your cards.
  • You’ve Got Some History: You’ve likely had credit for a few years, giving lenders a decent track record to evaluate.

For most everyday financial needs—like getting a car loan, a personal loan, or a standard credit card—a score in this range will do the trick. According to FICO, about 21% of Americans fall into this “good” category, making it a common benchmark.

However, “good” isn’t “great.” If you’re aiming for the best mortgage rates or elite credit card perks, you might need to push into the “very good” (740–799) or “exceptional” (800–850) ranges. Lenders often reserve their top-tier offers for these higher scores.

How Does a Good Score Stack Up?

To understand what “good” really means, let’s compare it to the extremes:

  • Poor (300–579): This range indicates serious credit issues—think multiple missed payments, collections, or bankruptcy. Only about 17% of people fall here, and they often face high interest rates or outright rejections.
  • Fair (580–669): A step up, but still below average. Around 20% of Americans are in this range. You might qualify for credit, but terms won’t be favorable.
  • Very Good (740–799): Now you’re in the top 25% or so. Lenders see you as low-risk, and you’ll likely enjoy competitive rates and terms.
  • Exceptional (800–850): The elite 21% of scorers. These folks get the red-carpet treatment—rock-bottom rates and premium offers.

A “good” score of 670–739 sits comfortably above the national average (which hovers around 714, per FICO’s 2023 data). It’s a respectable spot, but there’s room to climb if you’re chasing the best deals.

What’s a Good Score for Specific Goals?

A “good” FICO score isn’t one-size-fits-all—it depends on what you’re trying to achieve. Here’s how it plays out for common scenarios:

  • Mortgage: Most mortgage lenders require at least a 620 for conventional loans, but a score of 740+ often secures the lowest rates. At 670–739, you’ll qualify, but you might pay slightly more in interest.
  • Auto Loan: Car loans are more forgiving—scores as low as 600 can work—but a 670+ score typically gets you better rates from banks or credit unions.
  • Credit Cards: Basic cards accept scores in the 600s, but premium cards (e.g., Chase Sapphire or Amex Platinum) often target 720+. A good score of 670–739 might limit you to mid-tier options.
  • Personal Loans: Many online lenders approve scores in the good range, though rates improve significantly above 740.

If your score is in the good range, you’re in a strong position for most needs, but pushing it higher could unlock bigger savings.

How to Achieve (or Maintain) a Good FICO Score

If your score isn’t yet in the 670–739 range—or you want to keep it there—here are actionable steps to consider:

  1. Pay On Time, Every Time: Payment history is the biggest factor. Set up reminders or autopay to avoid slip-ups.
  2. Keep Credit Utilization Low: Aim to use less than 30% of your available credit. For example, if your limit is $10,000, keep your balance below $3,000.
  3. Don’t Close Old Accounts: Older accounts boost your credit history length, so hang onto them (unless they have high fees).
  4. Limit New Credit: Avoid opening multiple accounts at once, as hard inquiries can ding your score temporarily.
  5. Check Your Credit Report: Errors happen. Review your reports from Equifax, Experian, and TransUnion (free at AnnualCreditReport.com) and dispute inaccuracies.

Consistency is key. A good score reflects steady, responsible habits—not overnight miracles.

Can a Good Score Still Fall Short?

Yes, sometimes a “good” score isn’t enough. Lenders don’t rely on FICO alone—they also consider your income, debt-to-income ratio, and the specifics of your credit report. For example:

  • A 700 score with a recent bankruptcy might scare off lenders.
  • High debt levels could offset a good score, making you look riskier.
  • Some premium lenders (e.g., for jumbo mortgages) set higher thresholds, like 760+.

If you’re in the good range but getting denied or offered high rates, dig deeper into your financial profile.

The Bigger Picture: Beyond the Number

While a good FICO score is a powerful tool, it’s not the whole story of your financial life. It doesn’t reflect your savings, investments, or net worth—just your credit behavior. A millionaire with no credit history might have a low score, while someone living paycheck-to-paycheck could boast an 800. Focus on the broader goal: financial stability, not just a shiny number.

Conclusion

So, what is a good FICO score? In technical terms, it’s 670 to 739—a range that positions you as a dependable borrower with access to decent credit options. But in practical terms, it’s a stepping stone. It gets you in the game, but climbing to “very good” or “exceptional” can amplify your rewards. Whether you’re starting from scratch or fine-tuning an already solid score, understanding the FICO system empowers you to take control. Pay on time, keep balances low, and be patient—your score will follow. After all, in the world of credit, slow and steady wins the race.