Credit is important for modern living because it’s used to make purchases and it influences your financial well-being. If you’ve ever applied for a loan, lease or credit card, chances are you’ve been asked, “What’s your credit score?” or “Do you have good credit?” But, what’s a good credit score? Why is it important? How do you get your credit score? Let’s pull back the credit curtain and shed some light on the topic.


Good credit will help ensure that you have access to lending when you need it, and that you get the best terms and pricing for other necessities in your life.


What is credit?

Credit is your history of paying your debts to organizations that loan you money. Your credit “score” is determined primarily by three credit rating bureaus: Equifax, Experian and TransUnion. The score is based on several factors, including your history of paying bills and loan payments and whether those payments were made on time, and it’s used by banks, credit card issuers and other lenders to measure your perceived likelihood of paying your obligations on time in the future.

What's considered “good” credit depends on the type of credit score used. The most commonly known score is FICO®.1 The FICO score ranges from 300 to 850 and has five categories. The scores and their descriptions are:

  • Exceptional: 800+
  • Very good: 740 to 799
  • Good: 670 to 739
  • Fair: 580 to 669
  • Poor: 579 and lower

So as a general rule, a "good" credit score could be considered 670 or higher.

Why is good credit important?

A good credit score allows you to access lines of credit—personal loans, credit cards, mortgages, etc.—that most people will need at some point in their lives. With good credit, lenders are more likely to consider your application and potentially provide better loan terms. Conversely, a bad credit score can limit your access to credit or result in higher interest rates—which means you’ll end up paying more in the long run.

Credit scores are also used by non-lenders who have an interest in knowing your history of making payments. These could include landlords, insurance companies, mobile phone carriers and more. Good credit will help ensure that you have access to lending when you need it, and that you get the best terms and pricing for other necessities in your life.

How to obtain a credit report

Every American is entitled to one free report per year from each of the three credit bureaus. They can be accessed at, a Federal Trade Commission (FTC)-approved website. Your credit report can help you understand what your current score is, what credit accounts you currently have open, and why your current score may have moved up or down. Reviewing your report can also help ensure that you’re not a victim of ID theft and that your credit isn’t being used fraudulently. You can challenge your reports with the bureaus if they’re inaccurate, so it pays to review them closely. Learn more about credit reports here.

Use it wisely

Credit is an important financial tool and a key part of your overall financial health. Using it wisely by paying bills on time, not taking on more debt than you can handle, and monitoring your history will help ensure that your credit works for you—not against you.

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