A good credit score can be the difference between a favorable loan and an unfavorable one—or even no loan at all. However, what is considered “good” varies according to the standards of each of the three credit bureaus: Equifax, Experian, and TransUnion.
These credit bureaus rely either on a credit scoring system developed by Fair Isaac Corporation (FICO) or another scoring system known as VantageScore that is similar. Scores with both systems range between 300 (or 280 in the case of Equifax) and 850 points, with 280 or 300 being the lowest.
What is considered a good credit score with each of the credit bureaus?
Equifax, Experian, and TransUnion each have slightly different divisions for poor, fair, good, very good, and excellent credit. All three use a scale up to 850, however. The following table shows the quality scales for each bureau:
- Poor: 280 to 559
- Fair: 560 to 659
- Good: 660 to 724
- Very good: 725 to 759
- Excellent: 760 to 850
- Poor: 300 to 579
- Fair: 580 to 669
- Good: 67o to 739
- Very good: 740 to 799
- Excellent: 800 to 850
- Poor: 300 to 600
- Fair: 601 to 657
- Good: 658 to 719
- Very good: 720 to 780
- Excellent: 781 to 850
Equifax is the only credit bureau using a 280 to 850 range of credit scores, but it is still comparable to the 300 to 850 ones used by Experian and TransUnion.
What hurts your credit score?
The algorithm that calculates your credit score is complex and perhaps difficult to understand. Many things, like unpaid debts or late payments, are clearly things that can hurt a good credit score, inching it out of the good and into a “fair” or “poor” category.
There are other factors that many people do not realize adversely impact credit, too. Here’s a list of things that can hurt your credit:
- Canceling a credit card
- Credit report errors
- Debt settlement
- Lack of credit history
- Late payments
- Maxing out a credit card
- Missing payments
- Number of credit inquiries
The factors that indicate a risky payment history are the obvious culprits, such as missing payments or a foreclosure. Payment history is only a part of what makes up your score. Debt utilization, length of credit history, credit mix, and new credit also play roles.
What helps your credit score?
You can achieve what is considered a good credit score by doing many of the things listed in the previous section in reverse. For instance, if missing payments hurts your score, then making on-time payments helps it.
- Connecting credit bureaus to utility and telephone payment history
- Disputing errors on credit report
- Not closing unused lines of credit
- Keeping balances low on credit cards
- Opening credit cards only as needed
- Paying bills on time
- Paying off debt and credit cards
Most of these tactics to achieve what is considered a good credit score are no-brainers. Others are a little more difficult to understand. Debt utilization is an important part to contribute to a good credit score; this means a low percentage of credit used in relation to your credit available. That’s why you don’t want to close unused credit cards: It increases the credit that is available.
Credit mix, while not listed, is also important. If you have nothing but student loans, for instance, it does not establish enough payment history to decide if you are credit worthy. Ideally, you want a balanced blend of revolving and installment credit. Credit cards, for instance, are revolving: You can charge as needed, pay it off, and charge again. A home loan, on the other hand, is an example of an installment loan: You make payments at regular intervals until it is paid off.
New credit can negatively affect your credit score because it indicates a current need for funds. This potentially means it is more difficult to pay your prior obligations. It also does little to establish a payment history. Nonetheless, new credit eventually turns into old credit, so only open accounts as needed to help you achieve a good credit score.