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The Power of a Good Credit Score: Better Financial Products Are Possible

Lendstart Updated: January 18, 2024 • 6 min read

Key Points:

  • Credit Score Range: A good FICO score typically starts at 670, with 740-799 being very good and above 800 considered excellent.

  • Factors Affecting Credit Score: Key factors include payment history, credit utilization, length of credit history, new credit opened, and the mix of credit types.

  • Non-Factors: Credit scores do not consider personal details like age, race, or salary, focusing solely on credit history and behavior.

In the complex world of personal finance, your credit score is a crucial indicator of your creditworthiness. It's a key factor that lenders use to determine your eligibility for loans, credit cards, and other financial products. A good credit score can open doors to financial opportunities and favorable terms.

What Constitutes a Good Credit Score?

A credit score is a numerical measure derived from your credit report, reflecting your ability to repay borrowed money. The FICO score is a common model, ranging from 300 to 850. Scores above 670 are typically considered good, with 740 to 799 being very good, and above 800 excellent. A good score signals to lenders that you're a low-risk borrower.

What Factors Impact Your Credit Score?

Maintaining a good score depends on several crucial factors:

  • Payment History: Timely payments positively affect your score, while late payments can cause significant damage.
  • Credit Utilization: This is the ratio of your credit card balances to your credit limits. Lower utilization rates are better for your score.
  • Length of Credit History: A longer credit history generally boosts your score.
  • New Credit: Opening several new credit accounts in a short period can lower your score.
  • Credit Mix: A variety of credit types, such as credit cards, mortgage loans, and personal loans, can positively impact your score.

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What Information Credit Scores Do Not Consider

Credit scores do not factor in personal information like age, race, religion, marital status, or national origin. They also do not consider your salary, occupation, title, employer, date employed, or employment history.

Why There Are Different Credit Scores

  • Diverse Credit Reporting Agencies
    • The variation in credit scores partly stems from multiple credit bureaus - Equifax, Experian, and TransUnion. Each bureau collects and processes credit information differently, leading to slight variations in their reports and the resulting credit scores.
  • Various Scoring Models
    • Besides the credit bureaus, different scoring models like the widely known FICO score and VantageScore contribute to score differences. Each model uses unique algorithms and criteria, causing credit scores to vary.
  • Lender-Specific Models
    • Some lenders use customized scoring models tailored to their specific loan or credit product requirements. These models may prioritize different aspects of your credit history, leading to varied scores for different types of credit applications.
  • Updates in Scoring Algorithms
    • Scoring models are regularly updated to reflect current credit behaviors and lending environments. These updates can cause discrepancies, especially if lenders use different versions of the same scoring model.

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What is a Good Credit Score by Age?

Here's how credit scores can sometimes correlate with age groups, generally due to differences in credit history length and financial experience:

  • Young adults (18-29): Often starting to build credit, may have lower scores due to short credit history - For individuals aged 20 to 29, the average score is 663.
  • Adults (30-39): May see improvements in scores as they establish a more robust credit history and potentially higher credit lines - Those aged 30 to 39 have an average score of 672.
  • Middle-aged adults (40-49): Typically benefit from longer credit history and management experience, potentially leading to higher scores - For the 40 to 49 age group, the average is 683.
  • Older adults (50-59): Often have well-established credit histories and high scores, provided they have maintained good credit habits - Individuals between 50 to 59 years old have an average score of 703.
  • Retirees (60+): Usually have the highest scores due to very long credit histories and a lifetime of financial experience - For ages 60 and beyond, the scores vary by decade, with an average of 733.

What is a Good Credit Score to Buy a House?

When it comes to buying a house, having a good credit score can make all the difference. While the minimum credit score required to get a mortgage varies depending on the lender, a score of 620 is generally considered the minimum threshold. However, you typically need a credit score of 700 or higher to qualify for the best mortgage rates and terms. Remember that lenders will also look at other factors, such as your income, debt-to-income ratio, and employment history when determining whether to approve your mortgage application. Therefore, it's important to maintain good credit and improve your credit score if necessary, before applying for a mortgage to increase your chances of getting approved and securing favorable loan terms.

What is a Good Credit Score to Buy a Car?

When it comes to buying a car, having a good credit score can make a significant difference in the financing options available to you. A good credit score to buy a car is typically considered to be 680 or higher, although some lenders may require a higher score, such as 700 or above. This credit score range can help you qualify for better loan terms and interest rates, potentially saving you thousands of dollars over the life of the loan.

However, if you're looking to buy a used car, you may be able to secure financing with a slightly lower credit score. A good credit score to buy a used car is typically around 620 or higher. Again, it's important to keep in mind that these are general guidelines. Specific lenders may have different requirements depending on a variety of factors such as your income, debt-to-income ratio, and down payment.

What is a Good Credit Score to Get a Loan?

A FICO score of 670 or higher is generally considered a good credit score for getting a personal loan. However, credit score requirements may vary depending on the lender, the loan amount, and other factors such as your income and employment history. It's always a smart idea to check with the lender to determine their specific credit score requirements for a personal loan. Additionally, having a good credit score can also help you qualify for a lower interest rate on your personal loan.

What is a Good Credit Score to Get a Credit Card?

In general, a good credit score to get a credit card is between 690-719 or higher. However, credit card issuers may have different requirements and consider other factors such as your income, debt-to-income ratio, and credit history. It's always a good idea to check your credit score before applying for a credit card and to research the requirements of different credit cards to find one that fits your needs and credit profile.

Why Your Credit Score Changed

Your credit score can change due to several reasons, such as:

  • You paid off a loan or closed a credit account.
  • You missed or were late on a payment.
  • You used a higher percentage of your available credit.
  • There were changes in your credit history, like new accounts or inquiries.

What a Good Credit Score Can Get You

A good credit score can open many financial doors and offer several benefits, including:

  • Lower Interest Rates on Loans and Credit Cards: A good credit score often qualifies you for lower interest rates, which can save you a significant amount of money over time.
  • Higher Chances of Loan Approval: Lenders are more likely to approve loans for individuals with good credit scores, as it indicates a lower risk of default.
  • Better Credit Card Offers: With a good credit score, you're more likely to qualify for credit cards with better rewards, higher limits, and additional perks.
  • Easier Approval for Rental Houses and Apartments: Landlords often check credit scores during the application process. A good score can make it easier to rent a home.
  • More Negotiating Power: A good credit score gives you leverage to negotiate lower interest rates on loans and credit cards.
  • Lower Insurance Premiums: Some insurance companies use credit scores to determine premiums. A higher score can lead to lower insurance costs.
  • Utility Services Without Deposits: Utility companies may waive security deposits if you have a good credit score.
  • Easier Approval for Higher Limits: You may be eligible for higher borrowing limits on credit cards and loans with a good credit score.


A good credit score is essential to your financial health, influencing your ability to access and afford various financial products. Understanding the factors that impact your score, why it can change, and the benefits of maintaining a good score can empower you to make informed financial decisions and improve your overall financial well-being.


Has anyone gotten a 850 credit score?

Yes, some individuals have achieved a perfect 850 credit score, though it's relatively rare.

What is a respectable credit score?

A respectable credit score is typically considered to be 670 or above.

What is America's average credit score?

America's average credit score is around 716.

What is a good credit score to buy a car?

A good credit score to buy a car is generally 660 or above; however, scores above 780 often receive the best rates.

What is a good credit score to buy a house?

A good credit score to buy a house is typically 620 or higher for a conventional mortgage, but scores of 740 and above are likely to get better rates.

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