Having a credit score in one of the top scoring ranges can feel very empowering, especially if you’ve been working hard to be financially responsible and gradually build up a strong credit history. Beyond that, good credit can also open new doors, leading to financial growth and rare borrowing opportunities.
Knowing what benefits you can look forward to if you establish a good credit score will help you stay motivated to meet your goals and give you a better understanding of just how valuable good credit is.
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What is a good credit score?
The two main companies responsible for calculating credit scores have their own definitions of what counts as a good credit score:
- FICO: 670–739
- VantageScore: 661–780
These credit score classifications are guidelines, not hard rules. Your lender’s definition of a good credit score might not match up exactly with theirs. Still, if your score falls somewhere in those ranges, most lenders will consider you to have good credit.
If your credit score is higher than the ranges above, then it’s considered a very good or excellent credit score. The highest possible credit score you can get in both models is 850.
A credit score below the good range is considered a fair credit score or bad credit score. If this is where your credit is currently at, you might want to take steps to improve your credit score so that you can reap all the benefits that a good credit score offers.
The Full FICO Credit Scoring Range
What good credit can get you
A good credit score is more than just a number. It can win you access to the nine key advantages of good credit.
1. Better odds of credit card and loan approval
Lenders almost always check your credit score before extending you a new line of credit so that they can predict how well you’ll manage your payments.
The higher your credit score, the easier it’ll be for you to qualify for various credit products. You may also get approved more quickly than applicants with lower credit scores.
2. Lower interest rates
When you have a good credit score, lenders will generally offer you better interest rates on loans and credit cards. To put the difference into perspective, check out the table below.
Average Loan and Credit Card APRs by Credit Score Tier
| Credit Score Tier | Avg. Credit Card APR (CFPB) | Avg. Auto Loan Rate (Experian) |
|---|---|---|
| Deep subprime (300-499) | 23.9% | 14.39% |
| Subprime (500-600) | 23.3% | 11.92% |
| Near prime (601-660) | 22.6% | 7.65% |
| Prime (661-780) | 21.0% | 4.68% |
| Super prime (781-850) | 17.5% | 3.65% |
As you can see, if you’re a subprime borrower (meaning your credit is below the good range), you’ll get a 7.24% higher interest rate on average than you would if you were a prime borrower. On a $25,000 loan with a 60-month repayment period, that translates to $4,499 extra you’ll be paying overall for your loan. 1 2
The same rule applies to most other types of loans and credit accounts. It’ll cost you significantly more to borrow money with a poor credit score.
3. Higher credit limits
Since a good credit score signifies to lenders that you’re good about repaying your debts, they’re usually willing to offer you more money. This means larger loan amounts and higher credit limits on credit cards.
By contrast, it can be difficult or even impossible to borrow money when your credit score reflects a history of struggling with debt. You may be forced to pay deposits or put up collateral on loans to reassure your lenders.
4. More negotiating power
Lenders will fight for your business if you’ve got a high credit score. Since there’s a very low risk that you’ll fail to repay your debt, they’re almost guaranteed to profit from lending to you.
The advantage of being desirable to lenders is that you have more power to negotiate better loan terms. They know that you could easily take your business elsewhere, so they’ll be more willing to accommodate your requests. For instance, exceptional credit could get you a waiver for fees you’d otherwise have to pay, or an even lower interest rate.
5. Better perks and rewards
In addition to lower interest rates, a good credit score can qualify you for credit products that come with exclusive perks and rewards. Here are just a few examples:
- Cashback rewards
- Purchase discounts
- Travel rewards
- Introductory 0% APR offers
- Membership in exclusive clubs
- Invitations to special events
Many of these perks can be found among some of the very best rewards credit cards. Since you need a credit score of 670 or higher to qualify for many rewards cards, consumers with poor credit usually miss out. 3
6. More apartment options
Landlords often run credit and background checks as part of their tenant screening process. Although there’s no universal minimum credit score to rent an apartment, many landlords won’t consider applicants who have a FICO score lower than 620. 4
You can still get an apartment if you have poor credit, but your choices will be limited. Landlords may also ask for a larger deposit or require a cosigner (someone who agrees to pay your rent if you fail to). Having a good credit score eliminates this issue and may even give you an edge over prospective tenants who have a worse credit history.
7. Better job prospects
Although employers don’t check your credit score, they can view a limited version of your credit report to determine if you’re suitable for a position (with your written consent). 5 6
In fact, 91% of employers conduct credit checks for positions with financial responsibilities (e.g., jobs in banking or accounting). 7 If you have good credit, there usually won’t be any red flags on your credit report (like charge-offs, collections, or bankruptcies), so it’ll be easier to pass an employment background check.
8. Cheaper insurance
Insurers check a special credit score known as your credit-based insurance score when deciding how much to charge you for coverage. 8 Generally, the higher your credit score, the less you’ll pay less for insurance because consumers with higher credit scores are statistically less likely to file expensive insurance claims. 9
9. Cheaper utilities
Many utility providers run credit checks, and they may require you to pay a security deposit if you have poor credit. They’ll use this deposit as collateral, meaning they’ll keep it if you stop paying your monthly bills.
The reason for this is that utility accounts are technically a type of credit known as an open credit account. In essence, you receive a service or product (e.g., gas, electricity, water, or telecommunications services) and pay for it later in one lump sum.
If you have good or excellent credit, your utility company might waive your deposit, so you won’t have to pay any upfront costs for their services.
How to get a good credit score
Boosting your credit score up into the good range may take a little time and work, but you can’t go wrong if you adopt these key behaviors of people with good credit:
- Understand what impacts your credit score: Give yourself a solid foundation for establishing good credit by reviewing how credit works and what affects your credit score. This will give you insight into your credit health and where to focus your efforts.
- Pay your bills on time: Your payment history is the single most important credit scoring factor. Paying your bills on time every month is a guaranteed way to keep your credit score climbing long into the future.
- Keep your balances low: Using less of your available credit limit on credit cards and paying down your loan balances to a small fraction of what you originally borrowed will raise your credit score by showing you can maintain control over your debts.
- Keep old accounts open: One secret to good credit is a long credit history. The older your credit age, the higher your credit score and the more reliable you seem to lenders. Keeping credit card accounts open and active will benefit your score, even if you barely use them.
- Check your credit regularly: Without checking your credit score and credit reports, you won’t know how much progress you’ve made or which approaches are working and which aren’t. Monitoring your credit regularly is always an important part of maintaining good credit health.
In addition to the guidance above, you can explore credit hacks to speed up your progress and quickly boost your credit score into the good range, although major improvements take time. The most effective approaches involve fixing bad credit, building up good credit, and being patient as you progress on your credit journey.
