If you’re trying to understand the credit score range better, you’ve come to the right place. You’ll learn what the credit score range is, what good credit scores are, and what excellent credit scores are. Have you ever wondered what goes into calculating a credit score, or how to improve your own credit score? It’s possible to get into your desired credit score range if you understand a few simple facts.
There are different types of credit scores, so you’ll learn the difference between them. The main scores are Experian, Transunion, Equifax, and the most popular FICO credit scores. Because FICO is the most used credit score that lenders see, we’ll focus on it mostly. If you have a good credit score you can use it to your advantage. You can even travel for free (or close to it) by earning travel points and miles through credit card introductory bonuses. Learn how this is possible after understanding how the credit scores range works.
Simply put, credit is money borrowed for purchases or services that must be paid back within a certain timeframe. This money is typically borrowed from a bank or financial institution. Credit usually involves paying a fee, called interest over the time period that the money is borrowed. Credit can come in the form of a house mortgage, a car loan, or credit cards to pay for smaller purchases.
The most common credit score range is between 300 and 850. Almost all types of credit score use this range or something very similar. Within this credit score range, 300 is the worst possible score and 850 is the best. It is thought that any credit score above 800 is essentially the best because you will always receive the best interest rates and be approved for the best credit cards. For this reason, you should strive to earn an 800 or better on the credit score range. Knowing the possible scores within the credit score range is the first step to understanding credit.
FICO Credit Score Range
Now you may be wondering what scores mean and what credit score ranges are bad, fair, good or excellent. To the right, you will find a chart that shows the credit score ranges for each of the ratings. This chart separates the top scores into good, very good, and exceptional credit scores, while most ratings only have either good or excellent. It also shows what percentage of people in the United States fall into each of the categories. As you can see 66% of Americans have at least good credit. If you have at least a good credit score, you’ll have a better chance of being approved for some of the best travel credit cards.
What is a Good Credit Score?
A good credit score is one that falls between 670-749. With a score in this range, it is possible to be approved for credit cards that require good credit or better. Having a score of 700+ gives your chances of being approved for those higher level credit cards a boost. 670-699 is more of a gray area. Some lenders qualify this credit score range as good and others consider it to be fair. If you have a good credit score, you will likely be approved for loans, but will not get the best terms available to the market.
An excellent credit score is one that falls between 750-850. A perfect credit score is 850, but it is not very important what the number is after you reach 800. Anyone with a credit score over 800 will have the best chance of being approved for any credit card, and get the best interest rate on loans. Having a credit score of 800+ puts you in an exclusive club joining only about 20% of all credit scores. This high of a credit score is only possible if you’ve been responsibly using credit cards and loans for multiple years. With a score of 750-799 you should qualify for all credit cards and loans, but may not always get the best terms.
How are Credit Scores Calculated?
In order to have a FICO credit score, you need to have had at least one account open for six months. It must also have been reported to the credit bureau within the same time frame. Also, you must not show as deceased on your credit report. If you have a joint account with someone who passed away, you may need to close it or have the name of the deceased person removed from the account before your credit score will show up. While there are three major credit bureaus, with whom you’ll have slightly different credit scores, we’re going to focus on FICO. As mentioned before FICO scores are within the credit score range of 300-850.
FICO credit scores are calculated by using five differently weighted factors. The chart to the left shows the five factors and what percentage each is weighted in calculating a credit score. The most important factor is payment history, followed closely by credit utilization. The last three factors: credit age, types of credit, and inquiries combined are weighted about as much as the first two. This means that when you are considering how to improve your credit score, the two largest factors should be focused on the most.
Credit Score Range Factors
Payment History (35%)
Paying your loans and credit cards off in full and on time will help your credit score the most. An easy way to make this happen every time is by using automatic payments. It’s also wise to think about your credit card as if it were a debit card. Don’t spend money that you don’t actually have. Not only will it hurt your credit score, but you will be paying high-interest charges.
Credit Utilization (30%)
In terms of a credit card, this means that you want to keep the amount you spend to be less than 30% of the amount of total credit you have been given. So, if you have a credit line of ,000 you never want to have more than ,000 of debt on the card at any time. If you want to have an excellent credit score you should really try to keep this amount under 5% utilization. That means the higher credit line you have the better your utilization should be.
Credit Age (15%)
The longer you’ve had your accounts open, the more it will help your credit score. Just because you stop using a credit card very often doesn’t mean you should close it. If the card has no annual fee, keep it open and try to make a charge on it each year so that it doesn’t get automatically closed. If the credit card does have an annual fee, call the credit card issuer and ask if there are any no fee options that you can convert to. This is often an option and will help your credit score in the long run. For instance, if you have had a Chase Sapphire Preferred credit card, but no longer get enough value out of it to validate paying the annual fee, you can convert it into the no annual fee, Chase Freedom card. This will extend your overall credit age.
Different Types of Credit (10%)
Having different types of credit will slightly help your credit score. This means having multiple loans, such as credit cards, car loan, and mortgages actually help your score. While this does slightly affect your credit score, it is a very small factor.
Number of Inquiries (10%)
The number of hard credit inquiries you have within the past two years slightly affects your credit score. A hard inquiry happens each time you apply for a loan or credit card. Hard inquiries can also occur for things like rental applications. Typically, each time you apply for a credit card, your credit score will dip 3-5 points. Over the course of having a credit card, your score will improve more than that, due to the heavier factors above.
Do You Know Your Current Credit Score? [earnist_link ref=”credit-sesame” id=”6412″]Check for Free![/earnist_link]
Is your credit score a sports car or a clunker? You should be regularly watching your credit score. Errors do occur, and it’s always wise to keep an eye on what is going on with such an important factor in your finances. You can check your credit score for free with [earnist_link ref=”credit-sesame” id=”6412″]Credit Sesame[/earnist_link].
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Along with your overall credit score, they give you a grade A-F for each of the five credit score factors. They also send you updates and alerts via email anytime major changes happen to your credit. It’s an easy and completely free way to make sure your credit is safe. They even have an app now that you can check your score anytime you want conveniently on your cell phone.
700 Is the Magic Number for Travel Credit Cards
If you have a credit score of 700 or higher, you are in great shape to apply for travel credit cards that offer excellent rewards. With a score in this credit score range, you will likely be approved for any credit card you want. Many credit cards come with introductory offers that can be redeemed for more than $1000 in travel rewards. The best travel credit card to start with is the Chase Sapphire Preferred. It typically offers a 60,000 point introductory offer and waives its annual fee for the first year. That’s enough points to take a very nice vacation with.
This was the first ever travel credit card I applied for back in 2012 and it’s still the best card to start out with. In this post I wrote, you can find out how I spent those first points I earned through the Chase Sapphire Preferred card. You’ll also learn more details about this card and what makes it so great. If you’re interested in traveling, points can be your savior. You don’t have to be rich to travel like you are.
The Best Travel Credit Card Offers
While there are hundreds of rewards-earning credit cards, there are a few that really stand out. The main reason that certain credit cards stand out above the rest is the introductory offers for travel points. Travel credit cards offer an array of introductory offers ranging from 30,000 points to over 100,000 points. Two important factors in deciding what travel credit card to apply for are how many bonus points are offered and what the value of those bonus points are. Not all points are worth the same value when it comes to travel. When redeemed, some rewards points may be worth less than one cent, while others may be worth more than two cents each. Here are some of the best offers:
INTRODUCTORY OFFER You'll earn 60,000 points after spending $4000 in the first 3 months.
REWARDS You'll earn 2X points on travel and 3X on dining.
BENEFITS Points are worth 25% more when used in the Chase travel portal. No foreign transaction fees. 1:1 point transfer partner hotels and airlines.
FEES $95 No foreign transaction fees.
TRAVEL FREEDOM THOUGHTS This is the best first travel credit card to get. It has a valuable signup bonus with easy to redeem points. You also get a boost to your points value in the Chase travel portal.
[earnist_link ref="chase-sapphire-preferred-card" id="6313"]LEARN HOW TO APPLY NOW >>[/earnist_link]
Capital One Venture
INTRODUCTORY OFFER You’ll earn 50,000 points after you spend $3,000 in the first 3 months.
REWARDS You’ll earn 2X points on every purchase.
BENEFITS Statement credit for Global Entry or TSA PreCheck. Transfer points to airline and hotel travel partners.
FEES $95 annual fee. (waived year 1) No foreign transaction fees.
TRAVEL FREEDOM THOUGHTS This is a great travel credit card. It offers a large introductory offer, free TSA PreCheck for 5 years, plus the annual fee is waived the first year.
[earnist_link ref="capital-one-venture-rewards-card" id="10881"]LEARN HOW TO APPLY NOW >>[/earnist_link]
INTRODUCTORY OFFER You'll earn 100,000 points after spending $15000 in the first 3 months.
REWARDS You'll earn 3X points on travel and select business expenses (including online social media ads). *Limited to first $150k per year.
BENEFITS Points are worth 25% more when used in the Chase travel portal. No foreign transaction fees. Employee cards at no additional cost.
FEES $95 No foreign transaction fees.
TRAVEL FREEDOM THOUGHTS The signup bonus alone for this card is amazing. Pair that with some great rewards earning for your business and this card is great. If you have a business, we find the Ink Preferred to be the best offer available.
[earnist_link ref="ink-business-preferred-credit-card" id="6240"]LEARN HOW TO APPLY NOW >>[/earnist_link]
INTRODUCTORY OFFER You'll earn $200 (in the form of 20,000 Ultimate Rewards points) after spending $500 in the first 3 months.
REWARDS You'll earn 5% on rotating quarterly categories. (up to $1500 in purchases per quarter)
BENEFITS Points can be transferred to primary Chase cards for better redemptions. Free credit score.
ANNUAL FEE No annual fee
TRAVEL FREEDOM THOUGHTS This is one of the best "cash back" cards for earning rewards. You can earn up to 5X per dollar and those points can be transferred to a primary Chase card for better redemptions. It's a perfect card to pair with either of the Sapphire cards or the Ink Business Preferred.
[earnist_link ref="chase-freedom" id="6315"]LEARN HOW TO APPLY NOW >>[/earnist_link]
Wells Fargo Propel
INTRODUCTORY OFFER You’ll earn 20k points after you spend $1000 in the first 3 months.
REWARDS You’ll earn 3X points on eating out and ordering in. 3X on gas, transit, and rideshares. 3X on travel. 1X on all other purchases.
BENEFITS Intro APR offer.
ANNUAL FEE No annual fee.
TRAVEL FREEDOM THOUGHTS This is a great no-fee credit card. It has a good introductory offer and earns bonus points on many categories.
[earnist_link ref="wells-fargo-propel-american-express-credit-card" id="6498"]LEARN HOW TO APPLY NOW >>[/earnist_link]
INTRODUCTORY OFFER You'll earn 60,000 points after spending $4000 in the first 3 months.
REWARDS You'll earn 3X points on travel and dining. Also Earn a total of 10X points on Lyft rides.
BENEFITS $300 annual travel credit. Priority Pass Select airport lounge access. TSA PreCheck or Global Entry. Points are worth 50% more when used in the Chase travel portal. No foreign transaction fees. 1:1 point transfers to partner hotels and airlines. 1 year of Lyft Pink.
FEES $550 No foreign transaction fees.
TRAVEL FREEDOM THOUGHTS This is one of the best premium travel credit cards if you want some luxury. It has a valuable signup bonus with easy to redeem points. You also get a boost to your points value in the Chase travel portal. The biggest key to this card is the airport lounge access. If you travel a lot, it's extremely valuable.
[earnist_link ref="chase-sapphire-reserve-card" id="6311"]LEARN HOW TO APPLY NOW >>[/earnist_link]
Amex Platinum Card
INTRODUCTORY OFFER You’ll earn 80,000 Membership Rewards points after you spend $6,000 in the first 6 months.
REWARDS You’ll earn 5X points on flights booked directly with airlines or through American Express Travel. You’ll earn 5X points on prepaid hotels booked on amextravel.com.
BENEFITS Enjoy Uber VIP status and free rides in the U.S. up to $15 each month (bonus $20 in December). Enjoy access to the exclusive Global Airport Lounge Collection. $200 Airline Fee Credit, up to $200 every calendar year with one qualifying airline. Get up to $100 in statement credits annually for purchases at Saks Fifth Avenue on your card. Enrollment required. Fine Hotels & Resorts Access. Hilton & Marriott Gold Status. Discounts on First/Business/Premium Economy tickets.
FEES $550 annual fee. No foreign transaction fees. Terms Apply
TRAVEL FREEDOM THOUGHTS With a large introductory offer, statement credits, and airport lounge access, this is an excellent premium travel credit card.
[earnist_link ref="the-platinum-card-from-american-express" id="6500"]LEARN HOW TO APPLY NOW >>[/earnist_link]
How to Improve Your Credit Score
If your credit is not yet within the 700+ credit score range you need to work on building your credit. “How?”, you may ask yourself, is it possible to improve your credit score? Start by understanding the five factors that go into a credit score: Payment History, Credit Utilization, Credit Age, Types of Credit, and Inquiries. If you only focus on two things, let them be the two most important factors that add up to 65% of how credit score ranges are calculated.
Focus on the Most Important Factors
First, make sure your payments are always, always, always paid on time! ALWAYS! Second, get your credit utilization under 5%. Paying off your credit card in full every month will help with this. There are two ways to help this utilization percentage. Lower the amount of credit you use, or raise the amount of credit given to you. You can spend $500 monthly of a $10,000 total credit line, or $5,000 of a $100,000 credit line. If you keep your spending as is, and gradually add credit cards with $5-10,000 credit limits, ultimately your credit utilization will go down. Also, if you are in the market for a new car or home, don’t pay in full. Taking out a loan for either will help your credit mix which will improve your position in the credit score range.
Our Last Thoughts on the Credit Score Range
Now that you have a better understanding of credit score ranges, you can take advantage of, or work to improve your own score. You’ve learned what the credit score range is, what good credit scores are, and what excellent credit scores are. You know how a credit score is calculated and how to improve your own credit score. It is possible to get your credit score into your desired credit score range and to take advantage of the benefits of your good score. If you love to travel, go use your credit score to earn the vacation of your dreams. Over and over again!
Ryan loves to travel. He learned the power of using points and miles for travel way back in 2012 and hasn't looked back. Ryan's favorite place to travel is to Hawaii, where he's explored each of the main islands. Travel has changed his life for the better and opened him up to new experiences!
