What Is The Typical Range For Credit Scores?
Whenever you check on your credit score, most likely you will want to know how you compare with others. What is considered to be a good credit score?
A majority of the credit scoring models that are most commonly used have 300 to 850 ranges. Every lender sets standards of its own in terms of what it considers to be a “good” score. In general, however, scores fall along these lines:
- 720 and higher: Excellent credit
- 690-719: Good credit
- 630-689: Average or Fair credit
- 300-629: Bad credit
Fair Issac Corp. developed the credit scoring algorithm that most lending decisions in the U.S. utilize. A majority of FICO scores are in the range of 300 up to 850. The higher the score is, the better (There are also some FICO score versions, like those used in the credit card and auto industries, that use a 250 to 900 scale.)
According to the most recent data from April 2015, the average FICO score is 695. Around 54.7% of scores are 700 and higher, 23.3% are from 600 to 600; and 22% of scores are lower than 600.
Here is how these scores break down within each of the ranges, by score percentage:
FICO score ranges and percentages
|800 to 850||19.9%|
|750 – 799||18.2%|
|700 – 749||16.6%|
|650 – 699||13.0%|
|600 – 649||10.3%|
|550 – 599||9.4%|
|500 – 549||7.6%|
|300 – 499||4.9%|
Source: Fair Isaac Corp, FICO scores and data as of April 2015
The VantageScore, which is increasingly being used, uses the 300-850 scoring range as well. According to Experian, the credit reporting agency, in 2016 the average VantageScore was 673. (Since VantageScore and FICO take the same factors into consideration, in general the scores move in tandem; when there is a good score with one of them, it predicts a good score on the other.)
VantageScore ranges and percentages
|800 to 850||15.7%|
|750 – 799||14.6%|
|700 – 749||12.6%|
|650 – 699||18.3%|
|600 – 649||10.2%|
|550 – 599||11.8%|
|500 – 549||12.1%|
|300 – 499||4.6%|
Source: Experian, VantageScore ranges and percentages as of March 2016
How is your life affected by your credit score?
Even if you have a score that is in the low 500’s, it may still be possible for you to obtain credit, however it will either have specific conditions attached, like having to deposit money in order to receive a secured credit card or have a very high interest rate. You might need to put deposits down on your utilities or pay more for your car insurance.
However as you increase your score, you will gain access to additional credit products – and will be able pay less for them as well.
On the other end of the spectrum, borrowers who have scores over 750 have numerous options available to them, including be able to qualify for 0% interest credit cards and 0% financing on cars.
Find your starting point
Knowing where you stand is very important. That is why it really pays to over time monitor your score. There are numerous personal finance websites like NerdWallet where you can receive a free credit score.
The most thing you can do is use the same score each time you check it. Otherwise, it is similar to attempting to monitor your weight using a different scale each time – or switching between kilograms and pounds. Some sources might use a completely different scale. For example, Citi provides some of their credit card customers NextGen FICO credit card score access, which use a 250-900 scale.
So choose a score and then stick with it for monitoring your progress. When one score measures advancements you have made,it will be reflected in other scores as well.
Just be aware that scores fluctuate, just like weight does. A credit score is basically a snapshot. Each time you check the number can vary. As long as it is kept within a healthy range, these variations won’t impact your financial well-being in a significant way.
Lenders look at other things besides credit scores
Whenever you attempt to borrow money, having a good credit score by itself won’t guarantee approval or a good interest rate.
Your credit history is also review to gauge how likely it is that you will be repaying the money you borrow; you could have a ton debt but still have good credit scores if all of your bills have been paid on time.
However, it isn’t reflected in your credit report whether you are able to afford to repay whatever credit you are currently applying for. This is why other debts and your income play key roles in lending decisions, since some lenders will consider what you earn and the assets that you have along with what you owe.