Your credit score gets checked when you apply for a credit card, a car loan or a mortgage, and landlords can check it too. myFICO explains that lenders use it to decide whether to approve you and what rate to offer.
Higher scores generally get better rates and terms. On a car loan or a mortgage, a lower rate means paying less interest every month for years.
This guide covers the FICO score ranges, the five things that move your score and what you can do about each one. Understanding your score is one of the money skills that build wealth. To build another one, join our free investor livestream on November 17, where CEO Jaspreet Singh shows how to use ChatGPT and Claude to research stocks like a pro.
Credit score ranges: where a good credit score sits
Here are the FICO score ranges, copied from myFICO:
| Rating | FICO score range |
|---|---|
| Poor | \<580 |
| Fair | 580-669 |
| Good | 670-739 |
| Very Good | 740-799 |
| Exceptional | 800+ |
Source: myFICO, What Is a Credit Score?
FICO is the most widely used credit score, and myFICO says 90% of top lenders use it. Other scores, like VantageScore, have their own ranges, so the same credit history can get a different rating on a different scale.
Your score also changes over time. myFICO notes that it shifts whenever the details on your credit report shift, so the score a lender sees today may not match the one you saw last month.
What moves your credit score
myFICO breaks a FICO score into five parts, each with its own weight:
| Part of your score | Weight |
|---|---|
| Payment history | 35% |
| Amounts owed | 30% |
| Length of credit history | 15% |
| New credit | 10% |
| Credit mix | 10% |
Payment history
Payment history is your record of paying bills on time, and at 35%, it's the biggest part of your score.
What's the biggest killer of credit scores? Missed and late payments, because they hurt the biggest part.
myFICO says on-time payments can help your score, while missed or late ones can lower it. It also notes that one or two late payments aren't an automatic score-killer when the rest of your history is strong, so there's no single number of points to quote.
Amounts owed
This is how much you owe compared to your credit limits, and it's 30% of your score. If you owe $3,000 on cards with $5,000 in total limits, you're using 60% of your available credit, which is called credit utilization.
myFICO notes that using a high share of your credit can lower your score. Paying down your balances lowers that share, and a separate Briefs guide will cover credit utilization in more detail.
Length of credit history
This part looks at how long your accounts have been open. Older accounts help, which is one reason closing your oldest card can hurt your score.
New credit
Opening several new accounts in a short time counts here. Each application can add a hard inquiry, which is when a lender checks your credit before deciding.
Credit mix
Credit mix is the types of credit you have, like credit cards and loans. At 10%, it's one of the smallest parts, and it's not a reason to borrow money you don't need.
How to move your credit score in the right direction
The two biggest parts, paying on time and how much you owe, line up with the order the Briefs Climb to Wealth class teaches: save your first $2,000, pay off credit card debt in the right order, then automate it so you're not relying on willpower. The class doesn't promise any score change, but each step helps one of those two parts:
- Keep a small cushion. A $2,000 cushion keeps a surprise bill off your card, and Briefs explains why the emergency fund comes first.
- Pay down card balances in order. That helps the 30% part, and the guide shows how to pay off your credit cards in the right order.
- Pay every bill on time. Setting up automatic minimum payments protects the 35% part, even in a busy month when you forget the due date.
- Be careful opening new credit. That includes buy now, pay later plans, which are still a form of borrowing.
Finding money for bigger card payments starts with a budget. The 75/15/10 split Briefs teaches puts at most 75% of your pay toward lifestyle, at least 15% toward investing and at least 10% toward savings, and extra card payments come from cutting the 75%.
Investing involves risk including loss, and past performance does not indicate future results.
One call to negotiate your bills can free up money, like the $100 bill cut to $75 in the Climb to Wealth class example, and so can canceling subscriptions you forgot about.
Questions people ask about good credit scores
Can I get a $50,000 loan with a 700 credit score?
A 700 is in the good range, 670 to 739, on the FICO table above. Whether a lender approves a $50,000 loan, and at what rate, depends on more than your score.
myFICO notes there's no single minimum score that every lender requires, and each lender looks at things like your income and current debt. No score, on its own, guarantees an approval or a certain rate.
Why does a credit score matter if I'm not borrowing right now?
Your score matters the next time you apply for a car loan, an apartment or a mortgage. A better score generally means lower rates, which means less money paid in interest.
Credit scores and the rest of your money
The card balances that lower your score are usually the same ones making your monthly budget tight. Paying them off frees up money for a high-yield savings account and a full emergency fund, which keep the next surprise bill off your card.
When surprises get paid from savings, every bill can go out on time, which protects the 35% payment history part of your score. Briefs covers how to stop living paycheck to paycheck and the rest of managing your money.
Good credit score basics to remember
- On the FICO scale of 300 to 850, a good credit score is 670 to 739.
- Payment history (35%) and amounts owed (30%) are the two biggest parts.
- Paying on time and paying down card balances are the two places to start.
Before you take on new debt, read the Briefs guide to good debt and bad debt, which explains which loans are worth taking.
To learn a new money skill in one evening, join our free investor livestream on November 17, where CEO Jaspreet Singh will research stocks live with ChatGPT and Claude.
