In the United States, credit scores typically range from 300 to 850, with higher scores indicating better creditworthiness. Credit scores are calculated based on various factors, including payment history, credit utilization, length of credit history, types of credit, and recent credit applications. While different lenders and credit reporting agencies may have slightly different scoring models, here’s a general breakdown of credit score ranges:
- Poor: A credit score below 580 is generally considered poor. With a poor credit score, individuals may have difficulty obtaining credit or may face higher interest rates and less favorable loan terms.
- Fair: A credit score between 580 and 669 is considered fair. While it may be possible to qualify for credit with a fair score, borrowers may still face some challenges and may encounter higher interest rates.
- Good: A credit score between 670 and 739 is considered good. With a good credit score, individuals generally have better access to credit options and may qualify for more favorable interest rates and loan terms.
- Very Good: A credit score between 740 and 799 is considered very good. Individuals with very good credit scores are typically viewed as low-risk borrowers and often have access to a wide range of credit options and more favorable terms.
- Excellent: A credit score of 800 or above is considered excellent. This is the highest credit score range and indicates exceptional creditworthiness. Individuals with excellent credit scores often have the best access to credit options, lowest interest rates, and most favorable loan terms.
It’s important to note that different lenders may have varying criteria and requirements for extending credit. While credit scores play a significant role in determining creditworthiness, lenders may also consider other factors such as income, employment history, and debt-to-income ratio when making lending decisions.
Regularly monitoring your credit score and maintaining good credit habits, such as making timely payments and keeping credit utilization low, can help improve your credit score over time.