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A credit score ranges from 300 to 850 and is a numerical rating that measures a person's likelihood to repay a debt. A higher credit score signals that a borrower is lower risk and more likely to make on-time payments. Credit scores are often used to help determine the likelihood someone will pay what they owe on debts such as loans, mortgages, credit cards, rent and utilities. Lenders may use credit scores to evaluate loan qualification, credit limit and interest rate. For a score with a range between 300 and 850, a credit score of 700 or above is generally considered good. A score of 800 or above on the same range is considered to be excellent. Most consumers have credit scores that fall between 600 and 750. In 2021, the average FICO® Score☉ in the U.S. reached 714—an increase of four points from the previous year. Higher scores can make creditors more confident that you will repay your future debts as agreed. But creditors may also set their own definitions for what they consider to be good or bad credit scores when evaluating consumers for loans and credit cards. In part, this depends on the types of borrowers they want to attract. Creditors may also take into account how current events could impact consumers' credit scores, and adjust their requirements accordingly. Some lenders create their own custom credit scoring programs, but the two most commonly used credit scoring models are the ones developed by FICO® and VantageScore®. FICO® creates different types of consumer credit scores. There are "base" FICO® Scores that the company makes for lenders in multiple industries to use, as well as industry-specific credit scores for credit card issuers and auto lenders. The base FICO® Scores range from 300 to 850, and FICO defines the "good" range as 670 to 739. FICO®'s industry-specific credit scores have a different range—250 to 900. However, the middle categories have the same groupings and a "good" industry-specific FICO® Score is still 670 to 739. What Is a Good VantageScore?VantageScore's first two credit scoring models had ranges of 501 to 990. The two newest VantageScore credit scores (VantageScore 3.0 and 4.0) use a 300 to 850 range—the same as the base FICO® Scores. For the latest models, VantageScore defines 661 to 780 as its good range. What Affects Your Credit Scores?Common factors can affect all your credit scores, and these are often split into five categories:
FICO® and VantageScore take different approaches to explaining the relative importance of the categories. FICO® Score FactorsFICO® uses percentages to represent generally how important each category is, though the exact percentage breakdown used to determine your credit score will depend on your unique credit report. FICO® considers scoring factors in the following order:
VantageScore FactorsVantageScore lists the factors by how influential they generally are in determining a credit score, but this will also depend on your unique credit report. VantageScore considers factors in the following order:
What Information Credit Scores Do Not ConsiderFICO® and VantageScore do not consider the following information when calculating credit scores:
Why There Are Different Credit ScoresCredit scores are a tool that lenders use to make lending decisions. FICO® and VantageScore create different credit scoring models for lenders, and both companies periodically release new versions of their credit scores models—similar to how other software companies may offer new operating systems. The latest versions might incorporate technological advances or changes in consumer behavior, or better comply with recent regulatory requirements. For example, VantageScore creates a tri-bureau scoring model, meaning the same model can evaluate your credit report from any of the three major consumer credit bureaus (Experian, TransUnion and Equifax). The first version (VantageScore 1.0) was built in 2006. The latest version, VantageScore 4.0, was released in 2017 and developed based on data from 2014 to 2016. It was the first generic credit score to incorporate trended data—in other words, how consumers manage their accounts over time. FICO® is an older company, and it was one of the first to create credit scoring models based on consumer credit reports. It creates different versions of its scoring models to be used with each credit bureau's data, although recent versions share a common name, such as FICO® Score 8. There are two commonly used types of consumer FICO® Scores:
FICO® industry-specific scores are built on top of a base FICO® Score, and FICO® periodically releases new suites of scores. The FICO® Score 10 Suite, for instance, was announced in early 2020. It includes a base FICO® Score 10, a FICO® Score 10 T (which includes trended data) and new industry-specific scores. There are scores used more rarely as well. For instance, FICO® is slowly rolling out the UltraFICO® Score, which allows consumers to link checking, savings or money market accounts and considers banking activity. Lenders may also create custom credit scoring models designed with their target customers in mind. Lenders can choose which model they want to use. In fact, some lenders might decide to stick with older versions because of the investment that could be involved with switching. And many mortgage lenders use older versions of the base FICO® Scores to comply with guidelines from government-backed mortgage companies Fannie Mae and Freddie Mac. You also often won't know which credit report and score a lender will use before you submit an application. The good news is all the consumer FICO® and VantageScore credit scores rely on the same underlying information—data from one of your credit reports—to determine your credit scores. They also all aim to make the same prediction—the likelihood that a person will become 90 days past due on a bill (either in general or a specific type) within the next 24 months. As a result, the same factors can impact all your credit scores. If you monitor multiple credit scores, you could find that your scores vary depending on the scoring model and which one of your credit reports it analyzes. But, over time, you may see they all tend to rise and fall together. Why Having a Good Credit Score Is ImportantIn general, having good credit can make achieving your financial and personal goals easier. It could be the difference between qualifying or being denied for an important loan, such as a home mortgage or car loan. And, it can directly impact how much you'll have to pay in interest or fees if you're approved. For example, the difference between taking out a 30-year, fixed-rate $250,000 mortgage with a 670 FICO® Score and a 720 FICO® Score could be $72 a month. That's extra money you could be putting toward your savings or other financial goals. Over the lifetime of the loan, having a good score could save you $26,071 in interest payments. Additionally, credit scores can impact non-lending decisions, such as whether a landlord will agree to rent you an apartment. Your credit reports (but not consumer credit scores) can also impact you in other ways. Some employers may review your credit reports before making a hiring or promotion decision. And, in most states, insurance companies may use credit-based insurance scores to help determine your premiums for auto, home and life insurance. How to Improve Your Credit ScoresTo improve your credit scores, focus on the underlying factors that affect your scores. At a high level, the basic steps you need to take are fairly straightforward:
Other factors can also impact your scores. For example, increasing the average age of your accounts could help your scores. However, that's often a matter of waiting rather than taking action. Checking your credit scores might also give you insight into what you can do to improve them. For example, when you check your FICO® Score 8 from Experian for free, you can also look to see how you're doing with each of the credit score categories. You'll also get an overview of your score profile, with a quick look at what's helping and hurting your score. What to Do if You Don't Have a Credit ScoreCredit scoring models use your credit reports to determine your score, but they can't score reports that don't have enough information. For FICO® Scores, you need:
VantageScore can score your credit report if it has at least one active account, even if the account is only a month old. If you aren't scorable, you may need to open a new account or add new activity to your credit report to start building credit. Often this means starting with a credit-builder loan or secured credit card, or becoming an authorized user. Why Your Credit Score ChangedYour credit score can change for many reasons, and it's not uncommon for scores to move up or down throughout the month as new information gets added to your credit reports. You may be able to point to a specific event that leads to a score change. For example, a late payment or new collection account will likely lower your credit score. Conversely, paying down a high credit card balance and lowering your utilization rate may increase your score. But some actions might have an impact on your credit scores that you didn't expect. Paying off a loan, for example, might lead to a drop in your scores, even though it's a positive action in terms of responsible money management. This could be because it was the only open installment account you had on your credit report or the only loan with a low balance. After paying off the loan, you may be left without a mix of open installment and revolving accounts, or with only high-balance loans. Perhaps you decide to stop using your credit cards after paying off the balances. Avoiding debt is a good idea, but lack of activity in your accounts could lead to a lower score. You may want to use a card for a small monthly subscription and then pay off the balance in full each month to maintain your account's activity and build its on-time payment history. Keep in mind that credit scoring models use complicated calculations to determine a score. Sometimes you might think one event caused your credit score to increase or decrease, but it was a coincidence (for example, you paid off a loan, but your score actually increased due to a lower credit utilization ratio). Also, a single event isn't "worth" a certain amount of points—the point change will depend on your entire credit report. A new late payment could lead to a large point drop for someone who's never been late before, for example, as it may indicate a change in behavior and, in turn, credit risk. However, someone who has already missed many payments might experience a smaller point drop from a new late payment because it's already assumed that they're more likely to miss payments. How to Check Your Credit ScoreChecking your credit score was once a difficult task. But today, there are many ways to check your credit scores, including a variety of free options. Your bank, credit union, lender or credit card issuer may give you free access to one of your credit scores. Experian also lets you check your FICO® Score 8 based on your Experian credit report for free. The type of credit score you get can depend on the source. Some services may offer you a version of your FICO® Score, while others offer VantageScore credit scores. In either case, the calculated score will also depend on which credit report the scoring model analyzes. Some services even let you check multiple credit scores at once. For example, with an Experian CreditWorks℠ Premium membership, you can get your FICO® Score 8 scores based on your Experian, Equifax and TransUnion credit reports—plus multiple other FICO® Scores based on your Experian credit report. Monitor Your Credit Report and ScoreChecking your credit score right before you apply for a new loan or credit card can help you understand your chances of qualifying for favorable terms—but checking it further ahead of time gives you the chance to improve your score, and possibly save hundreds or thousands of dollars in interest. Experian offers free credit monitoring for your Experian report, which in addition to a free score and report, includes alerts if there's a suspicious change in your report. Keeping track of your score can help you take measures to improve it so you'll increase your odds of qualifying for a loan, credit card, apartment or insurance policy—all while improving your financial health. Learn More About Credit Scores
What is higher than excellent credit?The highest credit score you can have on the most widely used scales is an 850. For common versions of FICO and VantageScore, the scale ranges from 300 to 850 and lenders typically consider anything above 720 excellent credit.
Is above 750 excellent credit?Learn more about your credit score
A 750 credit score is Very Good, but it can be even better. If you can elevate your score into the Exceptional range (800-850), you could become eligible for the very best lending terms, including the lowest interest rates and fees, and the most enticing credit-card rewards programs.
Can you have a credit score greater than 850?Even a representative at FICO — the scoring model most lenders use to check applicants' creditworthiness — says that having a credit score in the top 2% of the U.S. population won't further benefit you, so there's no need to stress. It's also important to remember that it's impossible to earn a credit score above 850.
Is the highest credit score 850 or 900?The generic FICO® Score has a score range of 300 to 850, so a perfect score on that scale is, of course, 850. The same is true of the most recent scoring models from FICO competitor VantageScore®: Its VantageScore 3.0 and 4.0 models also use a 300 to 850 scale.
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