Your credit score is a three-digit number that determines what interest rates you qualify for, whether you get approved for loans and credit cards, and can even affect your insurance premiums and rental applications.
Table of Contents
FICO Credit Score Ranges
| Score Range | Rating | What It Means |
|---|---|---|
| 800–850 | Exceptional | Best rates and terms on everything. Virtually guaranteed approval. |
| 740–799 | Very Good | Near-best rates. Easy approval for most products. |
| 670–739 | Good | Competitive rates. Approved for most loans and cards. |
| 580–669 | Fair | Higher rates. May face restrictions or require larger deposits. |
| 300–579 | Poor | Difficulty getting approved. Very high rates when approved. |
The average American FICO score is 715, which falls in the “Good” range.
VantageScore Ranges
VantageScore is a competing model used by some lenders:
| Score Range | Rating |
|---|---|
| 781–850 | Excellent |
| 661–780 | Good |
| 601–660 | Fair |
| 500–600 | Poor |
| 300–499 | Very Poor |
VantageScore and FICO use the same 300-850 scale but categorize the ranges differently. Most lenders use FICO.
What Credit Score Do You Need For…
Mortgages
| Loan Type | Min. Score | Best Rate Score | Notes |
|---|---|---|---|
| Conventional | 620 | 740+ | Lower PMI cost with higher scores |
| FHA | 580 (3.5% down) | 740+ | 500 possible with 10% down |
| VA | No minimum* | 740+ | *Most lenders require 620+ |
| USDA | 640 | 740+ | For rural and suburban areas |
| Jumbo | 700–720 | 760+ | Higher thresholds for larger loans |
Credit Cards
| Card Type | Score Typically Needed |
|---|---|
| Secured credit card | Any (300+) |
| Student credit card | 600+ |
| Store credit card | 620+ |
| Standard rewards card | 670+ |
| Premium travel card | 720+ |
| Ultra-premium (Amex Platinum, etc.) | 740+ |
Auto Loans
| Score Range | Typical APR (New Car) | Typical APR (Used Car) |
|---|---|---|
| 781–850 | 4.8% | 5.9% |
| 661–780 | 6.4% | 8.2% |
| 601–660 | 9.5% | 13.1% |
| 501–600 | 13.2% | 18.4% |
| 300–500 | 16.5%+ | 21.0%+ |
Personal Loans
| Score Range | Typical APR |
|---|---|
| 720+ | 8–12% |
| 680–719 | 13–18% |
| 640–679 | 18–24% |
| Below 640 | 25–36% |
Renting an Apartment
Most landlords look for a minimum credit score of 620-650. In competitive rental markets (NYC, SF, Boston), landlords may prefer 700+.
How Much Credit Score Differences Actually Cost
The financial impact of your credit score is measurable in dollars:
Mortgage Example ($350,000, 30-Year Fixed)
| Credit Score | Rate | Monthly Payment | Total Interest | Extra Cost vs. Best |
|---|---|---|---|---|
| 760+ | 6.50% | $2,212 | $446,320 | — |
| 700–759 | 6.72% | $2,268 | $466,480 | $20,160 |
| 680–699 | 6.90% | $2,314 | $482,840 | $36,520 |
| 660–679 | 7.11% | $2,367 | $502,120 | $55,800 |
| 640–659 | 7.45% | $2,454 | $533,440 | $87,120 |
| 620–639 | 8.09% | $2,621 | $593,560 | $147,240 |
A score of 620 vs. 760 costs you $147,240 in extra interest on a single mortgage.
Insurance Premiums
Many states allow insurers to use credit-based insurance scores:
- Excellent credit: Base rate
- Good credit: 10-20% higher
- Fair credit: 30-50% higher
- Poor credit: 50-100% higher
This applies to auto insurance, homeowners insurance, and renters insurance.
How to Build From Poor to Good Credit
From Poor (300-579) to Fair (580-669): 3-12 months
- Get a secured credit card (deposit = credit limit)
- Use it for one small recurring charge
- Pay the full balance every month
- Dispute any errors on your credit report
- Become an authorized user on a family member’s oldest card
From Fair (580-669) to Good (670-739): 6-18 months
- Keep all utilization under 30% (aim for under 10%)
- Never miss a payment — set up autopay
- Avoid new credit applications
- Consider a credit-builder loan
- Keep old accounts open
From Good (670-739) to Very Good/Exceptional (740+): 12-24 months
- Maintain utilization under 10%
- Build a mix of credit types (cards + installment loan)
- Let your oldest accounts age
- Keep inquiries to a minimum
- Continue perfect payment history
Common Credit Score Myths
Myth: Checking your own credit hurts your score
Reality: Checking your own score is a “soft inquiry” and has zero impact. Only “hard inquiries” from lenders affect your score.
Myth: Closing old cards helps your score
Reality: Closing cards reduces your total available credit (increasing utilization) and shortens your average account age. Both hurt your score.
Myth: You need to carry a balance to build credit
Reality: You only need to use your card and pay it off. Carrying a balance just costs you interest — it provides no scoring benefit.
Myth: Income affects your credit score
Reality: Income is not a factor in any credit scoring model. However, income affects your ability to get approved for higher limits.
Myth: All debt is equally bad
Reality: Mortgage debt and installment loans in good standing can actually improve your credit mix (10% of your score).
How Long Negative Items Stay on Your Credit Report
| Item | Duration on Report | Impact Over Time |
|---|---|---|
| Late payment (30+ days) | 7 years | Diminishes after 2 years |
| Collection account | 7 years | Less impact after being paid |
| Chapter 7 bankruptcy | 10 years | Major impact declines after 3-4 years |
| Chapter 13 bankruptcy | 7 years | Major impact declines after 2-3 years |
| Foreclosure | 7 years | Major impact declines after 2-3 years |
| Hard inquiry | 2 years | Only impacts score for 1 year |
| Tax lien (unpaid) | Indefinite | Resolved liens removed after 7 years |
Where to Check Your Credit Score for Free
- AnnualCreditReport.com — Free weekly credit reports from all three bureaus
- Credit Karma — Free VantageScore from TransUnion and Equifax
- Your bank or credit card — Most major banks now provide free FICO scores
- Discover Credit Scorecard — Free FICO score (no Discover account needed)
- Experian — Free FICO Score 8
Related: Average Credit Score in America | Average American Debt | Average Credit Card Debt by State | Net Worth Percentile Calculator
