Credit scores range between 300 – 850, and a credit score of 700 or above is considered a good score. A score of 800 and above is excellent. Generally, most consumers have credit scores that fall between the range of 600 to 750. Higher credit scores make creditors more confident that you will be able to repay your future debts as agreed.
However, creditors might also set their own definitions of what qualifies as a good or bad score when they evaluate consumers for credit cards and loans. This partly depends on the types of borrowers they want to attract. They may also take into account how current events could have an impact on the scores of consumers, and thus, adjust their eligibility requirements accordingly. While some lenders have their own custom scoring programs, the two most commonly used models are the ones developed by VantageScore and FICO.
The first two credit scoring models of VantageScore had ranges between 501 to 990. The two newest ones use a range between 300 to 850. A good range according to VantageScore is between 661 to 780.
On the other hand, the base FICO scores are between a 300 to 850 range, and they define a good credit score as something between 760 to 739.
There are many factors that can affect your credit score, and they have been split into the following 5 categories:
Payment History
Making payments on time on all your credit accounts can help your credit score. But filing bankruptcy, having an account sent to collections, or missing payments could hurt your scores.
Credit History
How much you owe, how many of your accounts have balance, and the portion of your credit limit that you use on revolving accounts come into play here.
Length of Credit History
This includes the average age of all your credit accounts, along with the age of your newest and oldest accounts.
Types of Accounts
Showing that you can manage both your installment accounts (like a personal loan, mortgage, or car loan) and your revolving accounts (like credit cards and other types of credit lines) generally help improve your scores.
Recent Activity
This comes into consideration when you open or have applied for a new account.