People with credit scores between 300 and 850 have good credit. Scores between 670 and 739 are bad. Credit scores of 740 and above are very good while 800 and higher are excellent.
Credit scores between 300 and 850 are good, with a score in the mid to high 600s or higher being the best. A score in the high 700s or 800s is considered excellent. About a third of consumers have FICO® ScoresÎ that fall between 600 and 750âand an additional 48% have a higher score. In 2023, the average FICO® Score in the U. S. was 715.
Lenders use their own criteria for deciding whom to lend to and at what rates. But a higher credit score can generally help you qualify for a credit card or loan with a lower interest rate and better terms. The two main types of credit scores, the FICO® Score and VantageScore® credit scores, vary slightly in their ranges but have similar scoring factors.
There are many ways to save money and make your financial life easier if you have good credit history. But what exactly does having good credit get you? In this article, we’ll look at the 9 best reasons to keep your credit score high.
1. Lower Interest Rates
One of the biggest perks of a high credit score is access to lower interest rates on loans and credit cards. Lenders view borrowers with good credit as lower risk, so they can offer lower rates.
For example, on a $300,000 mortgage, improving your credit score from 640 to 760 could save over $100,000 in interest over the life of a 30-year fixed loan. That’s a huge savings just by having a better score!
2. Better Loan Terms
A good credit score not only gets you lower rates, but it also gets you better loan terms overall. This includes things like:
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Lower monthly payments – Thanks to lower rates, your monthly payment is lower. This improves affordability.
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Bigger loans—If you have good credit, you may be able to borrow more money. This is especially important for mortgages.
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Shorter loan terms – A better score may allow you to get a 15-year mortgage instead of 30-year, helping you pay off debt faster.
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Lower fees – Lenders may waive origination or application fees for borrowers with excellent credit.
3. Easier Approval
Having good credit vastly improves your chances of approval when you apply for loans or credit cards. Lenders view high credit scores as less risky, so you’re more likely to get the green light.
Bad credit can keep you from getting loans or credit even if you have a good income. But if you get a good score, the approval process goes much more quickly.
4. More Credit Card Rewards
To qualify for the best rewards credit cards with lucrative ongoing point earnings and sign-up bonuses, you typically need good to excellent credit.
Cards like the Chase Sapphire Preferred offer big bonuses worth $1000+ and valuable travel redemptions. But you need a 700+ score for approval. Maintaining good credit expands your rewards card options.
5. Better Insurance Rates
In most states, your credit score can impact your auto and homeowners insurance rates. Insurance companies view high credit scores as less risky, similar to lenders.
While a good score doesn’t guarantee lower insurance rates, it can certainly help. And in some cases, improving your credit by just a few points can decrease your premiums.
6. Easier Apartment Renting
Landlords and property managers often check credit scores when reviewing rental applications. While requirements vary, a good credit score improves your chances of approval.
It also minimizes the chances you’ll need a cosigner or large security deposit. So maintaining solid credit makes the apartment rental process much less stressful.
7. More Hiring Opportunities
For jobs requiring financial responsibility, employers may check your credit as part of a background check. Police officers, investment bankers, accountants, and cashiers are examples.
While they can’t see your exact score, employers can view your credit report. Good credit shows responsibility and reduces any concerns about temptation due to financial problems.
8. Security Deposit Waivers on Utilities
Utility providers like cable, electric, gas, and water companies sometimes check your credit before starting new service. If you have bad credit, they may require a security deposit.
But with good credit, you can often avoid paying these deposits. Saving several hundred dollars upfront when starting service is a nice perk.
9. It Builds Positive Credit History
Lastly, the simple act of maintaining good credit means you’re building a positive credit history. Robust payment histories, diverse credit mix, and low utilization all contribute to your score.
Not only do you benefit now, but a lengthy history of good credit sets you up nicely for future loan and credit card applications. Your reputation as a trustworthy borrower precedes you.
Summary
A good credit score unlocks the door to lower interest rates, better loan terms, rewards credit cards, insurance discounts, and much more. Improving your credit takes time and discipline, but pays dividends.
Monitoring your credit with services like Credit Karma helps you track progress. Establishing good financial habits like paying bills on time and limiting debt is key. With a little diligence, anyone can build good credit and reap the many benefits.
What Information Credit Scores Do Not Consider
FICO and VantageScore do not consider the following information when calculating credit scores:
- Where you live: Including your current and previous addresses.
- Demographics and beliefs: Your age, race, color, religion, national origin, sex, sexual orientation, gender identity and marital status. The Equal Credit Opportunity Act prohibits creditors from considering this information, or using credit scores that consider this information, when making lending decisions.
- Income and employment: Your salary, occupation, title, employer, date employed or employment history. However, lenders may consider this information when making decisions.
- Soft inquiries: A record of when someone checks your credit for a non-lending purpose. Soft inquiries are often the result of companies reviewing existing customers credit reports, creating marketing lists or responding to preapproval requests. They can also occur when you check your own credit report or when you use credit monitoring services from companies like Experian.
What Affects Your Credit Scores?
The common factors that can affect all your credit scores fall into several categories:
- Payment history: Making on-time payments on your credit accounts can help your scores. But missing payments, having an account sent to collections or filing bankruptcy could hurt your scores.
- Credit usage: How many of your accounts have balances, how much you owe and your credit utilization rateâthe portion of your credit limit that youre using on revolving accounts such as credit cardsâall come into play here.
- Length of credit history: This category includes the average age of all your credit accounts, along with the age of your oldest and newest accounts.
- Types of accounts: Also called “credit mix,” this considers whether youre managing both installment accounts (such as a car loan, personal loan or mortgage) and revolving accounts (such as credit cards and other types of credit lines). Showing that you can manage both types of accounts responsibly generally helps your scores.
- Recent activity: This considers whether youve recently applied for or opened new accounts.
FICO and VantageScore take different approaches to explaining the relative importance of the categories.
FICO uses percentages to represent how important each category generally is, but the exact percentage breakdown used to determine your credit score will depend on your unique credit report. FICO considers scoring factors in the following order:
What is a GOOD Credit Score in 2025? What’s the Average Credit Score Overall & By Age / Generation?
FAQ
What are the benefits of a good credit score?
A good credit score can help you in many ways, like getting lower interest rates on loans and credit cards. More room to negotiate. Better chance for credit card and loan approval. Easier approval for renting. Better car insurance rates. Get approved for higher borrowing limits. Get utility services more easily.
What will a 750 credit score get you?
A 750 credit score is generally considered very good and can provide access to the best loan terms and credit card offers.
What will a good credit score get me?
A credit score is a number that creditors use to determine your credit behavior, including how likely you are to make payments on a loan. There are times when a high credit score can help you get a loan, rent an apartment, or lower your insurance rate.
What will a 700 credit score get you?
A 700 credit score, generally considered a “good” score, can provide access to a wide range of financial products, including mortgages, car loans, and credit cards, with competitive interest rates and terms.