A good credit score is usually 670 or higher on the 300–850 scale most lenders use
The most common credit scoring model in North America is the FICO score, which ranges from 300 to 850. Lenders generally treat scores of 670 and above as acceptable for standard borrowing — mortgages, car loans, credit cards. Below 670, you will face higher interest rates, larger down payments, or outright rejection. Above 740, you move into the "good" range where rates drop noticeably. Above 800, you are in the top tier.
The exact cutoff varies by lender and by loan type. A mortgage lender might require 620 to approve you, while a credit card issuer might want 700. Some lenders use alternative scoring models like VantageScore, which also runs 300–850 but weights factors differently. The score itself is not a pass-or-fail test — it is a number lenders use to decide how much risk you pose and what price to charge for that risk.
Your score changes constantly as new information hits your credit report. A single late payment can drop it 50 to 100 points. Paying down debt can raise it 10 to 50 points over weeks or months. The score is not permanent; it reflects your recent behaviour and your current debt load.
Key Takeaways
- Scores of 670 to 739 are considered good; 740 and above is very good; 800 and above is excellent.
- Your score is built from five factors: payment history (35 percent), amounts owed (30 percent), length of credit history (15 percent), credit mix (10 percent), and new credit inquiries (10 percent).
- Different lenders set different minimum scores, so a score that works for one loan may not work for another.
- Your score updates as your credit report changes, so paying bills on time and reducing debt can raise it over weeks or months.
How the five factors that make up your score work
Payment history is the largest piece — 35 percent of your score. This means every on-time payment helps, and every late payment hurts. A payment 30 days late costs more in damage than a payment 60 days late, but both are serious. Accounts sent to collections or charged off (written off by the lender as a loss) stay on your report for seven years and tank your score.
Amounts owed makes up 30 percent. This is not just your total debt — it is your credit utilization ratio, the percentage of your available credit you are actually using. If you have a credit card with a $5,000 limit and a $2,500 balance, your utilization on that card is 50 percent. Lenders prefer to see utilization below 30 percent. Paying down balances raises your score faster than almost anything else you can do.
Length of credit history accounts for 15 percent. This rewards you for keeping accounts open over time. Closing old credit cards can hurt your score because it shortens your average account age. The oldest account on your report matters more than newer ones.
Credit mix is 10 percent of your score. Lenders want to see that you can handle different types of credit — credit cards, car loans, mortgages, personal loans. If you have only credit cards, your score will be lower than someone with the same payment history but a mix of account types.
New credit inquiries make up the final 10 percent. When you apply for a loan or credit card, the lender pulls your credit report. This is called a hard inquiry and it lowers your score slightly — usually by 5 to 10 points. Multiple inquiries in a short time (within 14 to 45 days, depending on the scoring model) usually count as one inquiry, so shopping for a mortgage or car loan in a short window does not hurt as much as applying for five credit cards in a month.
Why lenders care about your score
Your credit score is a prediction tool. Lenders use it to estimate the odds that you will pay them back on time. A higher score means lower risk, so you get better terms — lower interest rates, higher credit limits, faster approval. A lower score means higher risk, so you pay more or get turned down.
The relationship between score and interest rate is direct. On a 30-year mortgage, the difference between a 620 score and a 760 score can be 1 to 2 percentage points in interest rate. Over the life of a $300,000 loan, that difference adds up to tens of thousands of dollars. On a car loan, the gap is smaller but still significant — 0.5 to 1.5 percentage points depending on the lender.
Lenders also use your score to decide whether to lend to you at all. Most mainstream lenders have a minimum score they will accept. If you fall below it, you will not get approved, no matter how stable your income is. Some lenders specialize in lower scores, but they charge much higher rates to offset the risk.
What score you need for common types of borrowing
| Loan Type | Typical Minimum Score | Score for Better Rates |
|---|---|---|
| FHA mortgage | 580 | 700+ |
| Conventional mortgage | 620 | 740+ |
| Auto loan | 620 | 700+ |
| Credit card | 600–650 | 700+ |
| Personal loan | 600–650 | 700+ |
These ranges are guidelines, not rules. Individual lenders set their own minimums. A credit union might approve you at 600 when a bank wants 680. Online lenders often work with lower scores but charge higher rates. Always shop around — your score is the same everywhere, but the terms lenders offer for that score vary widely.
The minimum score for each loan type also depends on market conditions and the lender's risk appetite. During periods when credit is tight, lenders raise their minimums. During periods when credit is loose, they lower them. Checking with multiple lenders gives you a real picture of what you can actually get, rather than relying on published guidelines alone.
How to move from fair to good
If your score is between 580 and 669, you are in the "fair" range. Lenders will work with you, but at higher rates and with stricter terms. Moving into the "good" range (670+) usually takes three to six months of consistent action, though it depends on what is dragging your score down.
The fastest way to raise your score is to pay down credit card balances. If you owe $8,000 across three cards with a combined limit of $15,000, your utilization is 53 percent. Paying that down to $4,500 (30 percent utilization) can raise your score 20 to 50 points in a month. This works because utilization is recalculated every time your card issuer reports to the credit bureaus, usually monthly.
The second priority is making every payment on time, starting now. Late payments hurt less as they age — a payment that was 60 days late two years ago hurts less than one from two months ago. But the damage from a recent late payment fades over time. After two years, it has much less impact. After seven years, it falls off your report entirely.
Do not close old credit cards after paying them off. Closing an account lowers your average account age and reduces your total available credit, both of which lower your score. Keep the card open and use it occasionally to show activity.
Frequently Asked Questions
Does checking my own credit score hurt it?
No. Checking your own credit report or score is a soft inquiry and does not affect your score. You can check it as often as you want through your bank, credit card issuer, or free services like AnnualCreditReport.com. Only hard inquiries from lenders applying on your behalf lower your score.
How long does a late payment stay on my credit report?
A late payment stays on your report for seven years from the date it was first reported as late. It damages your score most in the first two years, then its impact gradually weakens. After seven years, it is removed automatically. Paying off the debt does not remove it, but it does stop the damage from growing.
Can I raise my score without a credit card?
Yes, but it is slower. You can build credit with a car loan, personal loan, or credit-builder loan (a small loan designed specifically to build credit). A secured credit card — one backed by a cash deposit — also works. The key is making on-time payments and keeping balances low relative to your limits.
What is the difference between my FICO score and my VantageScore?
Both range from 300 to 850, but they weight the five factors differently. FICO is used by most lenders for mortgages and auto loans. VantageScore is used more often for credit cards and personal loans. Your two scores may differ by 50 to 100 points because they prioritize different information. Most lenders tell you which score they use.
If I pay off a collection account, does my score go back up?
Paying off a collection account stops new damage, but it does not erase the account from your report. Your score may rise slightly because the account is now marked paid, but the collection itself stays on your report for seven years. The damage is permanent, though it weakens over time.