Somewhere along the line, you’ve probably heard that a 700 credit score is a good standard of the division between a Good credit score and a bad one. But is this true?

There’s certainly some truth to that. FICO is the standard for credit scores, with each credit score agency having their own, at times slightly different, scoring models. FICO Scores range from 300 to 850. The higher the score, the better you look to potential lenders. So, generally speaking, a 700 score is good — but, we’ll dive deeper than that.

As you can see from the chart below, the average American is struggling to get over that 700 score hurdle.

Credit Score Range and Average by Credit Provider

Credit Score Type	Credit Score Range	Credit Score Average
FICO NextGen Credit Score	150 - 950	695
TransUnion (TransRisk)	300 - 850	673
Experian National Equivalency Score	360 - 840	687
Equifax Credit Score	280 - 850	695

Source: Based on the VantageScore, FICO score, Equifax, and Experian credit score range model.

If you’re like most Americans and are looking for ways to earn a credit score over 700, keep reading. We’ll dive into whether or not that’s really a good score, what a 700 score can get you, how it’s derived and what you can do to achieve it.

Benefits of a 700 credit score or higher

In order to understand if 700 is a good credit score, it’s important to realize that there are two main scoring models used by the three credit bureaus (Equifax, TransUnion, and Experian). These two models are the FICO Score, created by a separate entity, and the VantageScore which was created by the three credit bureaus.

Although VantageScore and FICO calculate your score and then each credit bureau offers different versions of these scores, it’s really up to the specific lender to determine what thresholds they consider to be Fair, Good, Excellent, etc.

The chart below shows what is generally considered to be the standard breakdown of score ranges using the FICO credit scoring model as a guideline.

FICO credit score ranges

Credit Score Type	Credit Score Range	Credit Score Average
FICO NextGen Credit Score	150 - 950	695
TransUnion (TransRisk)	300 - 850	673
Experian National Equivalency Score	360 - 840	687
Equifax Credit Score	280 - 850	695

Source: Fair Isaac Corporation (myFICO.com).

As you can see, a 700 credit score is typically considered Good.

Why is Having a 700 Credit Score Important?

Having a Good credit score can mean all the difference when applying for credit. Below is an example of how important your score is when purchasing a home.

Two homebuyers want a $200,000 mortgage and both earn $55,000 a year. Buyer A has a 700 credit score and is approved for a 30-year loan with a 3.75 percent interest rate. Buyer B has a 745 credit score and gets the same loan at 3.25 percent instead.

A half percent may not seem like much, but it’s a costly fraction. Buyer A will have a monthly payment of $926 (not including property taxes or homeowner’s insurance). The total interest paid after 30 years will be about $133,000.

Buyer B, on the other hand, pays just $870 per month, not including property taxes or homeowner’s insurance, and after 30 years will have paid only $113,000 in interest. That half percent cost Buyer A $20,000, underscoring the value of a higher credit score.

No one wants to spend money they don’t need to. This is just one reason why having a better credit score can help you, not only immediately, but in the future as well.

What’s Considered a Good Credit Score?

Let’s first look at what is considered a Good credit score within the two different scoring models.

As you can see in the chart below, a Good credit score under the VantageScore model (typically used by TransUnion and Equifax) falls between 700 and 749.

Similarly, a good credit score under the FICO Score model falls between 670 and 739.

Comparing Good Credit Score Ranges by Scoring Model

Credit Score Model	Good Credit Score
VantageScore	700 to 749
FICO Score	670 to 739

Source: By these guidelines, yes —a 700 score would be considered a Good score.

Is 700 a Good Score for Equifax, TransUnion, and Experian?

As you know, there are three major credit bureaus: Equifax, TransUnion, and Experian. But did you know that there are different ways to calculate your credit score? FICO scores are the most commonly known, but VantageScore has their own formula for calculating your scores. For that reason, you may find that you have different credit scores — even from the same credit bureau.

Below is a quick breakdown of the credit score range for each of the three bureaus. You’ll notice that each has a different range for what is considered Poor, Fair, Good, etc.

Credit Score Ranges: TransUnion (VantageScore 3.0), Equifax, FICO

Ranges	Equifax	Transunion	Experian
Poor	280 to 559	300-550	300-499 (Deep Subprime)
Fair	560 to 659	550-649	500-600(Subprime)
Good	660 to 724	650-699	601-660(Near Prime)
Very Good	725 to 759	700-749	661-780(Prime)
Excellent	760 to 850	750-850	781-850(Super Prime)

Source: Data found October 3, 2018. Experian Information Systems website. Credit Score FAQs. Retrieved from https://www.experian.com/blogs/ask-experian/credit-education/faqs/credit-score-faqs, Equifax website. Equifax Credit Score Range US Only. Retrieved from https://help.equifax.com/s/article/Equifax-Credit-Score-ranges-US-only, TransUnion VantageScore 3.0 model.

Under these ranges, a score of 700 would be considered Good for Experian, but it’s only considered Fair for both TransUnion and Equifax.

Now, let’s take a look at what a 700 credit score can actually get you —in real life.

The chart below shows the different rates you might expect to get on various purchases with different credit scores.

Interest Rate Ranges for Different Credit Score Ranks

Type of Loan	Poor Credit	Fair Credit	Good Credit	Very Good Credit	Exceptional Credit
30 Year Fixed Mortgage Interest Rate	6.352%	5.588%	5.158%	4.767%	4.545%
Car Loan Interest Rate	15.24%	14.06%	7.02%	4.95%	3.60%
Credit Card Interest Rate	24.9%	17.6%	14.9%	12.2%	13.9%

Source: Credit Sesame asked 400 members about their interest rates during a three week period beginning on January 18, 2018.

As you can see, it’s obvious that having a score lower than 700 can greatly increase the interest rates you’re charged, and as your score improves, the interest rates go down.

What Makes Up Your Credit Score

If you are seeking to improve your credit, it is important to understand how your credit score is calculated.

FICO scoring model calculation (weight) factors

Credit Factors	Credit Score Weight
Payment History	35%
Credit Utilization	30%
Credit Age	15%
Different Types of Credit	10%
Number of Inquiries	10%

Source: https://www.myfico.com/credit-education/whats-in-your-credit-score

As you can see from the graph above, your payment history accounts for roughly 35 percent of your score, your credit utilization (your available credit vs. your balance) makes up about 30 percent of your score, the age of your credit makes up 15 percent, and the mixture of the credit accounts you hold and the number of credit inquiries you’ve had recently each account for roughly 10 percent of your score.

Knowing this, to improve your score, consider some of the following best practices:

• Make all your payments on time
• Get your credit utilization below 30%
• Dispute any errors on your report
• Ensure you have a good mix of credit
• Limit how often you apply for credit to reduce inquiries

Mastering some of these best practices can help you over the hurdle of achieving that good credit score of 700.

Sesame Data: Achieving a 700 Credit Score

Lastly, let’s look at some Sesame Data to see how long it really takes to get over that 700 score hurdle.

The chart below shows us that when we sampled Credit Sesame members who were trying to improve their credit, it took them roughly 125 days to go from Fair credit to Good credit. Remember, Good credit is generally a score that falls between 700 and 749.

Credit Score Range Improvements & Recovery Times

Recovery Credit Range	Recovery Credit Range	Avg Time (Days)	Participants
Poor Credit	Fair Credit	65	485
Fair Credit	Good Credit	125	385
Good Credit	Excellent Credit	295	283

Source: Surveyed 1,153 Credit Sesame members on 3/15/2018.

Paul, a Credit Sesame member since 2014, has had a similar experience. He used Credit Sesame to monitor his credit scores and get recommendations for credit cards.

As you can see from the chart below, Paul started with a 585 credit score in October 2015 and was able to achieve a 700 in February 2016.

Seeing how all the actions he took impacted his score can be a great way to understand how various actions could improve your own credit score.

Why Should You Learn What a Good Credit Score is?

When you take the time to understand what a Good credit score is and ways to improve your own credit score, you’re taking a step in the right direction regarding your own financial health.

TLDR; should you aim to get to a credit score of 700 and higher

In conclusion, yes —a credit score of 700 is a Good score. What’s more, having a Good credit score can help you get better interest rates, save on down payments, and overall have a better experience when applying for credit.

Now that you know a 700 credit score is Good, what steps will you take to achieve it?

The post Is 700 Really a Good Credit Score? appeared first on Credit Sesame.

Why you need to know about the VantageScore 3.0 model

VantageScore 3.0 is a consumer credit score — essentially a competitor of the popular FICO Score. A number of people and businesses use the VantageScore credit scoring model, including lenders, landlords, credit card companies, financial institutions, and more. Your credit can be pulled for many reasons, but here are some of the most common:

• Applying for a loan
• Applying for a credit card
• Applying for a new job*
• Trying to buy a new car
• Trying to buy a new house
• Trying to rent an apartment

* There are states that are now prohibiting employers from checking prospective and current employees credit. For more information please visit our article on this topic.

Credit scoring models were created by the major credit bureaus to predict the likelihood that you will repay any money you borrow. The VantageScore algorithm was developed in 2006 to compete against FICO. Initially, the model followed a different scale than FICO, but the companies that created it, realized they were fighting an uphill battle and has since adjusted their scoring model to reflect a similar scoring range as the FICO Score.

More than 6 billion VantageScore credit reports were used by lenders in 2017, and more than 1 billion went directly to consumers.

Why is VantageScore 3.0 Important?

While it may seem like just another random number to keep track of, your credit score is actually anything but. In fact, your credit score is a number that has a big impact on your financial life and health. You need credit for a number of things: buying a new car, renting an apartment, buying a home, applying for a line of credit, and more. Employers in all but 10 states can even run a credit check in the final interview stages, before extending a job offer. What’s more, did you know that your credit score can actually impact the outcome of each of the scenarios mentioned?

While the number of VantageScore requests decreased from 2015 to 2016, as you can see, it is still a very viable credit scoring model and one that is widely used.

Number of VantageScore Requests Annually

Year	VantageScore Request by Lenders
July 2014 to July 2015	8 Billion Requests
July 2015 to July 2016	6 Billion Requests

Source: Data found October 5, 2018. Your VantageScore website. (2017) VantageScore 4.0 Overview. (PDF file.) Retrieved from VantageScore 4.0 Overview. (2017). 1st ed. [ebook] VantageScore, p.4. Available at:
https://your.vantagescore.com/images/resources/VS4%20Overview%20WP%20-%20FNL.pdf [Accessed 3 Oct. 2018].

Learning about your VantageScore 3.0

Let’s take a closer look at VantageScore 3.0 — what matters most for VantageScore 3.0, the various factors that affect your score, VantageScore scoring range, how to get your VantageScore, VantageScore vs. FICO Score, and more.

What matters most for VantageScore 3.0

Unlike your FICO score, VantageScore prefers to stay away from exact percentages when it comes to the weight of factors in determining the score. Rather, it describes factors in terms of their influence — for instance, payment history is extremely influential, while recent credit behavior and debt are less influential. But in order to better understand the score, we will look at the percentage weight that VantageScore has used in the past.

The factors that matter the most are the same for both FICO Scores and Vantage Scores, so the best thing consumers can do to help increase and maintain their score is to pay all of their bills on time.

VantageScore 3.0 Weights and Factors

VantageScore Factors	Estimated Percentages
Payment history	41%
Credit age & variety	20%
Credit use	20%
Balances	11%
Recent credit applications	6%
Available credit	2%

Source: Data found October 3, 2018. Your VantageScore website. (2017) VantageScore 4.0 Overview. (PDF file.) Retrieved from VantageScore 4.0 Overview. (2017). 1st ed. [ebook] VantageScore, p.4. Available at:
https://your.vantagescore.com/images/resources/VS4%20Overview%20WP%20-%20FNL.pdf [Accessed 3 Oct. 2018].

TransUnion VantageScore Range

For the purpose of this article, we’re going to explain your TransUnion VantageScore range. As you can see below, VantageScore scores can range from 300 to 850 — similar to FICO Scores. Also like FICO Scores, the higher your score, the better your credit. But rather than add labels or classifications such as “Good,” “Fair,” or “Poor,” TransUnion takes it a step further and assigns a credit score rank, A through F, to your score. Think back to school — an A represents the best credit, and it goes down from there.

VantageScore has a proprietary formula that is applied to the data and info in your credit report. Often, each bureau will have a slightly different mix of data, because not all creditors report all of your activity to each bureau. VantageScore has announced a new algorithm, VantageScore 4.0, that is currently being tested by credit bureaus. It will treat medical debt differently and more leniently than the current algorithm, so it will bring a new update to how your data is approached.

VantageScore Credit Report Scoring Range

Transunion Credit Score Ranks	VantageScore 3.0	National Vantage Score Averages in Each Rank
A	781 to 850	74% to 100%
B	720 to 780	52% to 73%
C	658 to 719	35% to 51%
D	601 to 657	22% to 34%
F	300 to 600	1% to 21%

Source: Data found October 4, 2018. Transunion website. What is a good credit score range with TransUnion?. Retrieved from https://www.transunion.com/article/what-is-a-good-credit-score

VantageScore vs. FICO Score

There are several key differences between VantageScore and FICO Score:

Vantage Score takes less time to establish (a VantageScore can typically be produced in 1-2 months of a consumer opening an account, FICO takes 6 months)

VantageScore also takes into consideration recurring monthly payments (rent, utilities, etc) so some consumers who can’t be scored by the FICO model can still get a VantageScore

VantageScore ignores paid collections
VantageScore weighs late mortgage payments more heavily than other late payments (this can be good or bad, depending on your habits)
VantageScore makes allowances for consumers impacted and affected by natural disasters

Here’s a quick glance at the average VantageScore vs. the average FICO Score by generation.

Average FICO Score Versus VantageScore Subdivided By Generation

Age Group	Average VantageScore	Average FICO Score
Millennials	40% Received a C Score or Above 719+	41% Received a Good Score: 670+
Generation X	48% Received a C Score or Above 719+	50% Received a Good Score: 670+
Baby Boomers	54% Received a C Score or Above 719+	52% Received a Good Score: 670+
Silent Generation	58% Received a C Score or Above 719+	59% Received a Good Score: 670+

Source: Credit Sesame surveyed 500 Americans on their Vantage Scores. 100 are in Generation Z age range, 100 participants are Millennials, 100 respondents are included in the Generation X age range, 100 participants are Baby Boomers, and 100 participants are members of the Silent Generation age range. This study was conducted November 2016 over a period of three weeks.

Benefits of learning about VantageScore 3.0

As we mentioned earlier, your credit health plays a tremendous role in your life. Having good credit can not only make your life easier — it can save you significant amounts of money in the process. The first step to taking control of your credit is to check your credit report and understand your credit score, as well as what it can impact and how it can benefit you. And, while the FICO Score model is well known, it is important to note that VantageScore is just as effective for long-term tracking of your overall credit score.

Savvy consumers will also use the difference in scoring models to their advantage. Since each model weights various factors differently, your score may be slightly higher with one model over the other. Once you know which model offers you a better score, you can use this to your advantage. For instance, let’s say that you have a better VantageScore and you’re applying for a mortgage loan. Bank A uses the FICO model for scoring, but Bank B uses VantageScore — making Bank B the likely better choice.

But don’t just take our word for it. We spoke with Credit Sesame member, Eleanor, to find out why she checks both her VantageScore AND FICO Scores.

Why Eleanor S. checked both her FICO and VantageScores

Member Since: 5-4-2016

	b>Source Information (Interviewee)	b>
We interviewed Eleanor S. on December 18, 2016; she earns $109,000 a year is 48 years old and lives in Santa Monica, Calif. She is single and doesn’t have kids and is currently working as a television producer.
Q You’re among the population who check both your FICO and VantageScore, why did you elect to check both numbers?
I’ve always been fastidious with my finances, but a few months ago our company experienced an unfortunate data breach. I used my work computer to move money around from time to time and my financial account passwords were among the data mined by the hack. Of course, I changed all my details and updated my passwords, but thieves are clever today. So, I decided to pay the fee to check both scores. I was lucky I changed all my information because one of the stage hand’s credit cards was maxed out overnight due to fraudulent activity.
	b>Was there a difference in your scores?	b>
Not really, my VantageScore was lower (B Score 778) than my FICO Score (Very Good Score 784). I figure the scales vary a little, but overall were so close to one another there was no reason for alarm or further investigation.

Eleanor’s story reminds us that it’s important to check all your reports and scores periodically, as you never know if there is inaccurate information. What’s more, it’s a reminder that —while your scores may not differ too much— they are, in fact, calculated differently and can vary from bureau to bureau. This information can be helpful when you’re applying for new credit.

Let’s say you know your mortgage company pulls your Experian report, but that’s your lowest score. Maybe you wait for 30-days and try to improve the score before you apply or you get a rate quote from a different lender who pulls reports from the bureau that is associated with your highest score. Because there are so many different scores, and lenders are not required to use one over another, it pays to find out which score they will be using in advance. That way you can be prepared.

Why the VantageScore 3.0 model matters

To quickly recap, VantageScore 3.0 is simply a model used to score your credit. There are slight differences between VantageScore and FICO, including the factors that contribute to your score and the weight they represent.

Regardless of what score you’re looking at, the strategies are the same to improve your credit. Make your payments on time, keep your credit utilization down, limit your applications for new lines of credit — and you’ll start to see your score improve in no time.

The post The VantageScore 3.0 Model & How It Works appeared first on Credit Sesame.

Our International Women’s Day Report 2018 is a culmination of Credit Sesame data and surveys we have conducted over the last year that specifically targets issues around gender and finances, including who handles money better and what kind of sacrifices men and women would make to obliterate their debt.

While women are still at a disadvantage because of the gender wage gap (women still make roughly 80 cents to a man’s dollar) and high student loan debt, they are rising as leaders in the financial space.

One survey asked if people would rather have a man or woman as a financial advisor. The response overwhelmingly favored women.

These results, and others continue to propel women forward in the financial space. Check out the results in the report.

The post International Women’s Day Report 2018 appeared first on Credit Sesame.

So, what does this all mean?

Credit Sesame decided to poll 1,000 people and ask if they expect to pay more or less in taxes this year.

Their response was concerning, as 42% said they simply didn’t understand the bill enough to even make that determination.

Here are results from our survey:

Do you expect to pay more or less in taxes as a result of the new tax bill?

• I don’t know (I don’t understand the new tax bill): 42%
• I expect to pay less in taxes: 34%
• I expect to pay more in taxes: 24%

Men vs. Women: Who understands the new tax bill more?

Women are more likely than men to say they do not understand the new tax bill while men are more likely to say they expect to pay less taxes.

Generational Differences

Millennials are most likely to say they do not understand the tax code while
middle-age generations (those 45 to 64) are more likely to say they expect to pay less taxes.

Midwesterners the Least Likely to Pay More Taxes

We noticed that the regional differences are not as stark as age and gender differences.

Taxpayers in the South are most likely to say they do not know how their taxes will be affected, while those in the Midwest are most likely to expect to pay less in taxes.

Can you guess who will expects to pay the most? That’s right, West Coast residents! 

So, what about your taxes?

Do the survey responses resonate with you? If you’re unsure how to navigate your taxes this year, be sure to get started early with a tax professional so you can have time to gather documents and mitigate any surprises along the way.

Remember, you have until April 17, 2018 to file your taxes or request an extension.

Even if you file for an extension you still need to pay your taxes by April 17. You must estimate and pay by that date, otherwise, you may incur interest and have to pay penalties.

Other tips

• If it’s your first year filing taxes, we wrote a guide for beginners.
• Owing money to the IRS can be scary. Here’s what to do if you owe money and don’t have the funds to pay the IRS.

Methodology

We used a Google consumer survey, which surveyed about 1,000 people.

The post Survey: Will Americans End Up Paying More or Less in Taxes This Year? appeared first on Credit Sesame.

The Basics

In order to obtain a LendingPoint personal loan, which is available in amounts from $2,000 to $25,000 with either  term durations ranging from 24 to 48 months. You do need to meet a few criteria:

>At least 18 years old

>Have government-issued ID and social security number

>Have a minimum credit score of 600

>Have an income of at least $25,000 per year

>Verified bank account in your name

Prospective users can apply online at LendingPoint’s site; the company does a soft pull on an applicant’s credit report and provides loan offers, if applicable. Once an applicant selects an offer, LendingPoint performs a hard pull to verify his or her information. Upon approval, the company initiates the funds-transfer process within 24 business hours. Applicants should keep in mind that LendingPoint charges $30 late-payment fees and also requires an origination fee of up to 6% of the loan, but applicants can choose to pay this amount up front or spread it out across their monthly payments.

You don’t have to use your LendingPoint loan for debt consolidation; the company lets you choose from a number of other popular uses for personal loans, from paying for a wedding or vacation to funding a move or medical procedure. The company offers payback terms ranging from 24 through 48 months and has interest rates that range from 9.99% to 35.99% APR.

LendingPoint Loan Comparison

LendingPoint has made a niche for itself by targeting underserved borrowers, but it’s one of many new online lenders that have cropped up in the past decade. Take a look at how LendingPoint’s personal loan compares to the competition.

SoFi

SoFi and LendingPoint have target customer bases that are almost diametrically opposite. While LendingPoint focuses on consumers at the bottom end of the creditworthiness spectrum, SoFi tends to focus on those at the top. Although SoFi doesn’t have a minimum credit score or income requirement, it’s worth noting that the company has a reputation for being highly selective.

SoFi also stands out among personal lenders because it offers loans in amounts ranging from $5,000 to $100,000 with 2 to 7 year terms. Interest rates vary from 5.99% – 16.49% APR with auto-pay.

Earnest

Earnest is another company that, like LendingPoint, takes different factors into account aside from credit score alone. Other criteria Earnest considers include an applicant’s education, payment history, savings volume and income. If LendingPoint is appealing to you because you have bad credit and low income with little savings, these additional criteria from Earnest may not provide any assistance.

If you can qualify for an Earnest personal loan, you may be better off choosing that company over LendingPoint thanks to its more favorable fixed rate APRs that start at 6.99% and end at 18.24%. The available loan amounts vary between $5,000 and $75,000, and Earnest also offers payment terms of 3, 4, or 5 years. With a longer term, your monthly payments can be much lower, and the lower APR can also help make Earnest’s personal loan much more comfortable to carry.

Prosper

Prosper is a peer-to-peer lending service, which provides a different type of funding for loans than those that traditional financial institutions offer. The Prosper personal loan requirements stipulate a minimum credit score of 640 for approval, so if you’re below this, it’s a moot point whether Prosper offers a better deal than LendingPoint.

If your score sits at or above 640, Prosper’s fixed rate interest APRs range from 6.95%–35.99%. Given that the company doesn’t consider applicants with credit scores lower than 640, if you’re right over the mark with a score of 640 or higher, you can expect to pay interest that’s on the higher end of this scale.

Summary

If you’re a fair credit consumer, LendingPoint’s personal loan should certainly be on your list of potential solutions, whether you’re trying to finance a major purchase or event or you want to consolidate your debt for faster payoff. If you can thread the needle just right, LendingPoint may be able to offer you a better rate than you can find elsewhere, and under much more favorable terms than a payday lender or 0% APR credit card that requires collateral to secure. There are many lenders out there that offer lower interest rates, but if your credit is in the low-to-mid 600s, LendingPoint may be more interested in having you as a customer and therefore more willing to offer you acceptable terms.

The post LendingPoint Personal Loan Reviews: Great alternative to other lenders? appeared first on Credit Sesame.

Understanding what a good credit score is (and how to achieve it) can mean all the difference in your financial health, as well as your ability to secure the best interest rates and terms. Keep reading as we explore what a good credit score it, how to achieve it, and what it can get you.

What is a good credit score?

There is no doubt that you’ve aspired to have good credit throughout your adult life. But, do you really know what that means? What score is really a good credit score? And, what’s the impact that a good credit score can have on your wallet?

Although the first step in knowing whether your score is good or bad is checking your credit report, you can see from the data below that a vast majority of Gen Z’ers have never checked their credit score.

How Many Americans Check Their Credit Scores?

Generation	Checks Weekly	Check Monthly	Checks Quarterly	Never Checked
Gen Z	1%	2%	23%	74%
Millennials	3%	8%	44%	45%
Gen X	2%	14%	30%	54%

Source: We surveyed 650 US consumers on 9/5/18 during a time period of 2 weeks.

Once you’ve checked your credit score and you see those three digits, what do they mean?

For the purpose of this article, we’ll look at the FICO score, which is the most common and widely-used score. A FICO score that falls between 670 and 739 is generally considered to be good credit.

Why is understanding good credit important?

Understanding your credit score is important for a number of reasons, as that three-digit number can have a big impact on many of the large purchases you will make throughout your lifetime.

For example, let’s say that you want to buy a home. A poor credit score may get you a 6 percent interest rate, while a good credit score may get you a 4 percent interest rate. This can translate into thousands of dollars in interest over the course of your mortgage.

What’s more, knowing your credit score and where you fall in the credit range is the first step in taking control of your financial wellbeing.

As you can see from the data below, however, a large part of the population (particularly those in Generation Z) was unable to correctly identify various credit score rankings and ranges.

Percent of Americans Who Understand Credit Scores

Age Group	Correctly Identified Credit Score Rankings and Ranges	Incorrectly Identified Credit Score Rankings and Ranges
Generation Z	25%	75%
Millennials	94%	6%
Generation X	89%	11%
Baby Boomers	72%	28%
The Silent Generation	63%	27%

Source: Credit Sesame quizzed 600 Members with a multiple choice test. The results illustrate which participants correctly answered the entire poll. Incorrect answers often included partially correct results. The survey was conducted April 2015 for two weeks.

Now that we know the importance of understanding your credit score, let’s jump a bit deeper into what a good credit score really is.

What is a good credit score?

To understand what a good credit score is, it’s important to know how it’s calculated. Each financial decision you make is either helping or hurting your score; by knowing how these decisions impact your score, you can make strategic moves to improve your credit.
Your credit score is made up of a variety of factors, some that impact it more than others.

FICO Scoring Model Calculation (Weight) Factors

Credit Factors	Credit Score Weight
Payment History	35%
Credit Utilization	30%
Credit Age	15%
Different Types of Credit	10%
Number of Inquiries	10%

Source: Data found September 26, 2018. Boeing Employees Credit Union website. Understanding Your FICO Score. Retrieved from https://www.becu.org/articles/understanding-your-fico-score

As you can see from the graph above, your payment history accounts for roughly 35% of your score, your credit utilization makes up about 30% of your score, the age of your credit makes up 15%, and the mixture of the credit accounts you hold and the number of credit inquiries you’ve had recently each account for roughly 10% of your score. But what do those factors mean?

Here are some quick definitions to help you understand these factors:

• Payment history—Looks at whether or not you’ve been paying on time.
• Credit utilization—Looks at how much of your available credit you’re using.
• Credit age —Looks at the average age of your open credit accounts.
• Different types of credit —Looks at the mix of your various credit types.
• Number of inquiries—Looks at the number of inquiries into your credit history.

Now that you know what factors play into your score, let’s look at what “good credit” means from the three credit bureaus.

Credit Score Ranges: TransUnion (VantageScore 3.0), Equifax, Experian

Rank	Equifax	Transunion	Experian
Poor	280 to 559	300-550	300-499 (Deep Subprime)
Fair	560 to 659	550-649	500-600(Subprime
Good	660 to 724	650-699	601-660(Near Prime)
Very Good	725 to 759	700-749	661-780(Prime)
Excellent	760 to 850	750-850	781-850(Super Prime)

Source: Data found October 3, 2018. Experian Information Systems website. Credit Score FAQs. Retrieved from https://www.experian.com/blogs/ask-experian/credit-education/faqs/credit-score-faqs, Equifax website. Equifax Credit Score Range US Only. Retrieved from https://help.equifax.com/s/article/Equifax-Credit-Score-ranges-US-only, TransUnion VantageScore 3.0 model.

U.S. Population Categorized by the Five FICO Ranges for Credit Scores

Age	< 580	580 - 669	670 - 739	740 - 799	800 >
Under 30	29%	38%	17%	11%	5%
30 - 39	35%	24%	10%	16%	15%
40 - 49	26%	24%	10%	17%	23%
50 - 59	19%	22%	10%	17%	32%

Source: We ran a survey of 550 US consumers in different age groups on 9/26/2018 to understand which credit score ranges they fell into.

With all this being said, what is the real-world application? What does a good credit score get you when compared to those with poor or even excellent credit?

Good credit scores: Good for your wallet

While a good credit score isn’t the highest you can achieve, you’re still in a relatively good position when it comes to securing good interest rates and terms on some of life’s biggest purchases.

As you can see from the data below, someone with good credit can get good interest rates for a mortgage, car or credit card —but someone with very good or exceptional credit gets even better rates.

Average Interest Rates Divided by Credit Score Range

Type of Loan	Poor Credit	Fair Credit	Good Credit	Very Good Credit	Exceptional Credit
30 Year Fixed Mortgage Interest Rate	6.352%	5.588%	5.158%	4.767%	4.545%
Car Loan Interest Rate	15.24%	14.06%	7.02%	4.95%	3.60%
Credit Card Interest Rate	24.9%	17.6%	14.9%	12.2%	13.9%

Source: Credit Sesame asked 400 members about their interest rates during a three week period beginning in January 18, 2018.

While the difference in interest rates may not seem that large, there is a big financial impact over the term of the loan. Say you’re applying for a 30-year mortgage for a $244,368 home. If you have fair credit, you could expect an interest rate of 5.588 percent —but if you have good credit, that interest rate drops to 5.158 percent.

While 0.4 percent doesn’t sound like much, it actually adds up to more than $22,000 over the lifetime of the loan —money that’s essentially flying out of your bank account thanks to your credit score.

If you have good credit and you still want to improve your score, there are some tried-and-true strategies to help make those improvements. Let’s look at a few in more detail.

How to improve a good credit score

Whether you’re trying to improve your credit score or simply want to employ some best-practices in order to keep your score in tip-top shape, there are a number of different strategies you should know. Below is a quick digest of some of the top strategies.

• Make consistent on-time payments —your payment history makes up roughly 35% of your FICO score and has the biggest impact on your score’s calculation.
• Improve your credit utilization —this is the amount of credit your using versus what’s available to you. Most experts agree that 10% is optimal, but you should strive to never go above 30%.
• Consider your mix of credit —your score also takes into account your mix of credit. This includes credit cards, store cards, mortgage loans, auto loans, etc.
• Keep your oldest accounts open —you may be inclined to close old accounts, but the age of your credit matters. In most cases, you should keep your oldest accounts open.

For more detailed strategies on how to improve your credit, you can read our recent article.

Sometimes, however, we learn better from example. Let’s take a look at how Credit Sesame member, Jeff, was able to improve his already good credit score.

How Jeff improved his already good credit score

Member Since: 1/19/2015

We interviewed Jeff on May 2, 2017; he earns $63,000 a year is 43 years old and lives in Buffalo, New York. He is married and doesn’t have kids and is currently working as a videographer.
How were you able to improve your credit score?
My credit score wasn’t terrible to begin with (712) because I’ve been improving my credit score since before I bought my home in 2015. I improved my credit by researching how people with similar scores brought up their credit scores with the credit reporting companies.
What strategies did you use?
I decided to lower my credit utilization and pay down my debts in larger payments over a six month period. I was approved for a small loan from my local bank which had significantly lower rates than my credit cards, so I switched. I saved almost $8000 with this decision. The loan allowed me to free up my credit cards and reduced the debt-to-credit-ratio which gave my credit a small eight-point boost. The bank also agreed to report my regular payments to Experian, Equifax, and TransUnion which improved my score a couple points every few months. The most effective strategy by far is consistent, regular payments, budgeting, and patience. It took nearly three years for my credit score to reach its peak of 756.
How long did it take you to see a difference in your score?
My credit score moved up pretty fast after I shifted my credit card balance to a bank loan. It improved to 729 after about eight weeks. The untraditional reporting that my bank agreed to do for me aided in nudging my credit score up to its current position which took a total of 34 months to reach 761.

Jeff’s story is a great example of how, even when we already have good credit, we can take steps to achieve an even better credit score.

Benefits of learning what a good credit score is

The benefits of learning about your good credit score and understanding your report are many. For one, if you understand your score, you’re able to make strategic improvements to boost your credit score into the next credit score range.

Furthermore, there is truth to the expression that “knowledge is power” —having an understanding about your good credit can place you a step ahead in trying to improve that score and will also give you the knowledge you need to make sound financial decisions.

TLDR; about the good credit score

A good credit score, using the FICO model, falls between 670 and 739. If you have a good credit score, you can easily get approval for various loans and credit cards, but you may pay a higher interest rate when compared to those who have very good or excellent credit.

Lenders will look at your score to make a judgment on your financial wellbeing, so it’s in your best interest to constantly work to improve your score. Understanding the definition of what a good credit score is —that’s just the beginning!

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