What Is a Good Credit Score?

Approved Credit Score.
••• KLH49 / Getty Images

Your credit score is a three-digit number that indicates to creditors and lenders how likely you are to repay your bills or the risk of you defaulting on your credit card or loan payments.

The FICO score, one of the most commonly used credit scores, ranges from 300 to 850 with higher credit scores being better. While other types of credit scores may have a different range, higher credit scores are always better than lower ones.

What Is a Good Credit Score?

Whether or not you have a good credit score depends on who is checking your credit score and the criteria they're measuring you by. In general, a good credit score—on the FICO scale—is above 720, but for some creditors and lenders, the limit may be slightly lower or slightly higher.

Having a good credit score tells lenders that you're likely to pay your bills on time based on how you've paid your bills in the past. If you've paid your bills on time and have managed credit well for the past several years, you'll likely have a good credit score.

Your credit score can affect other areas of your life as well since some prospective employers will look at your credit report. Aside from having trouble qualifying to buy a new home or car, a poor credit score can also affect your insurance rates and your ability to finance a new cellphone, among other things.

Getting Approved With a Good Credit Score

With a good credit score, you'll typically have your applications approved and get a good interest rate. Be aware that, even with good credit, credit card and loan approval isn't guaranteed because creditors and lenders consider other factors in addition to your credit score.

Your income, employment, and level of debt are some things creditors and lenders usually consider, and lacking in any of these areas can lead you to be denied. This tells you that a good credit score is not a predictor of your ability to pay, but your likelihood of paying.

If you don't have a good credit score, it doesn't necessarily mean your applications will be denied. But if you are approved, you will likely have a higher interest rate. If you're applying for utilities or other monthly services, you may have to pay a security deposit to get your services established, or the creditor or service provider may require you to have a co-signer before you can be approved.

Do You Have a Good Credit Score?

You can check your FICO score, the credit score most lenders use by visiting online sites such as myFICO.com. You can also purchase your TransUnion or Equifax FICO score which usually costs about $15.95 or so, depending on the site you visit. There are other places to see your credit score, like CreditKarma.com, sometimes for free, and some sites that will estimate your FICO score.

You'll find that you likely have credit reports with each of the three major credit-reporting bureaus and that the information in each credit report could be different. Since your credit score is based on your credit report data, your scores can easily vary.

It's possible to have a good credit score with one credit bureau and fair credit scores with the other bureaus. This can happen if you have a debt collection or other negative account that appears on one credit report but not on the others.

Once you order your credit score, most providers will give you an overview of your score, telling you whether your score is poor, fair, good, or excellent. You'll also learn what factors are contributing to your credit score. If you don't have a good credit score, check your credit report to learn more about which accounts are hurting your credit. Don't worry, you can typically improve your credit score by reducing high balances, paying off past-due accounts, and building a more positive payment history.

If errors are contributing to a poor credit score, you can dispute them with the credit bureau.  A better credit score won't happen overnight, but with time and the right actions, you'll see your credit score increase.