If you’re wondering what credit score you need to get approved—or to land the best rates—the quick answer is this: anything 661 or higher is considered good, and a score above 780 is excellent.
Your credit score can unlock lower interest rates on mortgages, car loans, and credit cards. It can also make it easier to rent an apartment, get approved for insurance, or even land certain jobs.
This guide breaks down what a good credit score really means, how it’s calculated, what credit score you need for different goals, and how to improve it if you’re not there yet.
Credit Score Ranges: What’s Good, Fair, or Poor?
Lenders mostly rely on the FICO scoring model, which ranges from 300 to 850. VantageScore uses the same range, so the breakdown below applies to both:
- Excellent: 781 to 850
- Good: 661 to 780
- Fair: 601 to 660
- Poor: 501 to 600
- Bad: 300 to 500
Your FICO score is the one most lenders check when you apply for credit, whether it’s a mortgage, auto loan, or credit card.
See also: What Is the Average Credit Score in America?
Why Your Credit Score Matters
Your credit score can cost or save you thousands. Lenders use it to decide whether to approve you and what rates to offer. A higher credit score usually means:
- Lower interest rates – This can mean big savings over time, especially on mortgages and car loans.
- Easier approvals – You’re more likely to get approved for loans, credit cards, and even apartment leases.
- Higher credit limits – Lenders are more comfortable offering larger limits when your credit score shows responsible borrowing.
Even a small increase in your credit score can unlock better terms and save you money.
Credit Score Requirements for Major Financial Milestones
Your credit score affects whether you’ll get approved—and what rates you’ll be offered. Here’s a breakdown of the minimum credit scores typically needed for major financial milestones, along with what score range gives you access to the best terms.
Buying a House
Most conventional mortgage lenders look for a credit score of at least 640. That’s the floor for approval, but it won’t qualify you for great terms.
To get the lowest rates, aim for a credit score of 720 or higher. FHA loans allow for credit scores as low as 580, and VA loans technically have no minimum, but most lenders still want to see a score of at least 620.
Buying a Car
Auto loans are available at nearly all credit score levels, but the interest rate you get varies a lot.
- 720 or higher: Qualifies for the best financing offers
- 680 to 719: Good rates still possible
- 620 to 679: Higher rates, but approval is likely
- Below 620: You may face steep interest or need a larger down payment
Renting an Apartment
Landlords typically want to see a credit score of at least 620. In competitive rental markets, you might need an even higher score.
If your credit score falls below 620, expect to pay a larger security deposit or bring on a cosigner. Some landlords may also require automatic rent payments.
Getting a Credit Card
If your credit score is 700 or higher, you’re in the zone for low-interest credit cards with rewards and no annual fees.
If you’re in the 640 to 699 range, you can usually qualify for solid credit cards, but the perks may be limited. Below 640, your best option may be a secured credit card to help you build your credit.
What Affects Your Credit Score
Your credit score is determined by five core factors that reflect your financial habits and payment history. While the exact formula is proprietary, FICO considers these primary components to calculate your credit score:
- Payment history (35%) – Paying on time is the most important factor. Late or missed payments hurt your credit score fast.
- Credit utilization (30%) – This is the percentage of your available credit you’re using. Keeping it below 30% is best.
- Length of credit history (15%) – The longer your credit accounts have been open, the better. Lenders like to see experience.
- New credit (10%) – Opening several accounts in a short period can make you look risky to lenders.
- Credit mix (10%) – A healthy mix of credit cards, loans, and other account types shows you can handle different forms of credit.
What Doesn’t Affect Your Credit Score
Your credit score is based only on the information in your credit reports—and several things that people think affect it actually don’t. Here’s what’s not factored in:
- Income – How much you make isn’t used in credit scoring models.
- Employment – Your job title, employer, or work history has no impact.
- Bank balances – Your checking or savings account balance doesn’t show up on your credit report.
- Demographic data – Age, race, sex, marital status, religion, and location are not included.
- Soft inquiries – Checking your own credit score or getting preapproved does not lower your score.
FICO vs. VantageScore: Why Your Credit Scores Can Differ
FICO and VantageScore are the two main credit scoring systems. Both use a range of 300 to 850 and factor in similar things—like payment history and credit utilization—but they’re not the same.
FICO scores are used in over 90% of lending decisions, especially for mortgages, credit cards, and auto loans. VantageScore, created by the three credit bureaus, is more commonly shown by free credit apps.
Each model uses slightly different formulas and may weigh some factors differently. Lenders also get to choose which scoring model and which credit bureau to use, which is why your score can vary depending on who’s checking it.
Why You Have More Than One Credit Score
You don’t have a single credit score—you have dozens. Here’s why:
- Each credit bureau has different data. Not all lenders report to all three, so your credit reports may not match.
- There are multiple scoring models. FICO and VantageScore each have several versions, like FICO Score 8, FICO Score 10, and VantageScore 4.0.
- Lenders choose what they use. One might use a FICO Auto Score from TransUnion. Another might use a VantageScore from Experian.
So it’s normal to see different scores depending on where you check and what kind of loan you’re applying for.
How to Improve Your Credit Score Fast
You don’t have to wait years to see progress. These simple moves can raise your credit score faster than you think:
- Pay bills on time – Even one late payment can do serious damage. Set reminders or automate payments if needed.
- Pay down credit card balances – Lowering your credit utilization is one of the fastest ways to boost your credit score.
- Avoid opening too many new accounts – Each application triggers a hard inquiry, which can lower your credit score temporarily.
- Dispute errors on your credit reports – Mistakes happen. If you spot incorrect late payments, charge-offs, or collection accounts, file a dispute right away.
- Use secured credit cards to build or rebuild credit – Secured credit cards require a deposit, but report to the three major credit bureaus just like regular cards.
- Become an authorized user – If someone with good credit adds you to their card, that account may show up on your credit report.
- Use rent and utility reporting services – Some third-party tools let you add rent, phone, and utility payments to your credit history.
How to Check Your Credit Score for Free
You can check your credit score without paying a cent. Many credit card issuers and banks now offer free access to your FICO score through online dashboards.
You can also use apps like Credit Karma or Credit Sesame. Just know these usually show your VantageScore—not your FICO score, which is what most lenders use.
For a full picture, check your credit reports from all three credit bureaus once a year at AnnualCreditReport.com. That won’t show your score, but it’s the best way to spot errors and track your accounts.
Final Thoughts
A perfect credit score of 850 looks great, but it’s not something you need to chase. Most lenders offer their best rates and terms once your score hits the mid-700s.
The real goal is to keep your credit score in the good or excellent range so you have access to low interest rates, easier approvals, and more financial freedom.
Small changes—like paying on time and lowering your balances—can make a big difference. You don’t have to be perfect. You just have to make progress.
Frequently Asked Questions
How often do lenders update my credit information?
Most lenders report to the credit bureaus every 30 to 45 days. That means your credit score can change monthly based on your payments, balances, and new account activity.
Can I have different credit scores from each credit bureau?
Yes. Each credit bureau—Experian, Equifax, and TransUnion—may have slightly different information, so your credit scores can vary. This is normal and expected.
Why did my credit score drop even though I paid off a loan?
Paying off a loan is a good thing—but in some cases, it can cause a small drop in your credit score. That’s because closing the loan may reduce your credit mix or lower the average age of your accounts.
If that loan was your only installment account, your score might dip temporarily. But over time, it’s still a positive move and won’t hurt your credit long term.
Will closing a credit card hurt my credit score?
It can. Closing a card may increase your credit utilization and reduce the average length of your credit history, both of which can lower your credit score.
Does paying off a loan improve my credit score?
It depends. Paying off a loan shows financial responsibility, but if it’s your only installment loan, your credit mix could suffer slightly. Overall, it’s usually a net positive in the long run.
Can I build credit without using a credit card?
Yes. You can build credit by taking out installment loans (like auto or student loans), using credit-builder loans, or reporting on-time rent and utility payments through third-party services.
