Good Credit

Good Credit
“Good credit” is a loose description of a borrower’s history of repaying debts. If you have good credit, this could mean you’re viewed as trustworthy when you borrow. This helps when applying for a loan or credit card because you’re more likely to be approved, and get better interest rates.

What is Good Credit?

Good credit means you are viewed as more trustworthy by creditors. It means that you have a history of paying bills on time and have a minimal amount of outstanding debt. With good credit, you will have more access to personal loans and credit cards; you will also be able to secure better terms and lower interest rates.

What is a credit score?

A credit score is a number that represents your credit history, including your history of bill payment, credit usage and several other factors. The most commonly used credit score is the FICO score. This score was created in 1989 by Fair, Isaac and Company (now called FICO). Credit score and FICO score are two terms that are often used interchangeably, but there are also non-FICO credit scores available. A FICO credit score can be anywhere from 300 to 850.(1)

What is a good credit score?

A good FICO credit score is considered to be anything from about 680 to 850. And within this “good credit” range for FICO scores, there is another distinction — a credit score between 720 and 850 is considered excellent credit.(2)

A credit score is determined by the information in your credit report.

What’s in a credit report?

Each of the three credit bureaus — Equifax, Experian & Transunion — has a credit report for every consumer. A credit report includes information from several different categories, including:

  • Identity: The person’s name, age, address, employment and social security number.
  • Credit: The loans or credit cards the person has taken out in the past. The bureaus collect information on how much money was borrowed, whether the person maxed out their credit limit and whether they regularly made payments on time.
  • Public record: Any bankruptcies, tax liens or court judgments that the person might have in their past.
  • Inquiries: How many times other lenders, employers or landlords have requested a copy of a person’s credit report(3).

According to federal law, each of the credit bureaus are obligated to provide one free copy of a person’s credit report per year. To request a free copy of your credit report, visit All of the information contained in that report is used to determine your credit score.

Where can I get my credit score?

There are several different ways to access your credit score:

  • Check your loan or credit card statement as many companies will include your credit score on those documents.
  • Consult with a HUD-approved counselor who can provide you with your credit score. Find a HUD-approved counselor near you at this site.
  • Use a free online credit scoring service such as
  • Purchase your FICO score from

What is bad credit?

A bad FICO credit score is usually considered to be any number from 300-619. You might have bad credit for a variety of reasons, including a history of making late payments, filing for bankruptcy or maxing out credit cards. Having bad credit makes it more difficult to take out a loan or get access to a credit card. If you have bad credit, you’ll likely have to pay higher interest rates when taking out a loan or credit card.

How do I improve/build my credit score?

Some of the ways to improve your credit score include:

  • Pay bills on time
  • Use less than 30% of your credit limit
  • Monitor your credit score
  • Check your credit report and dispute any errors
  • Apply for credit only when you need it.


  1. Lamb, Lori. “What is a good credit score?” January 22, 2014. Accessed March 16, 2016.
  2. O’Shea, Bev. “What Is the Range for Credit Scores?” Nerd Wallet. January 30, 2016. Accessed March 23, 2016.
  3. “Credit Reports and Credit Scores.” Consumer’s Guide. Board of Governors of the Federal Reserve System. Accessed March 15, 2016.
  4. “Where Can I Get My Credit Score?” Consumer Financial Protection Bureau. October 14, 2015. Accessed March 23, 2016.