What is a good credit score, and how do I get one?

1 min readLast updated January 30, 2024by Unbiased team

Learn where the lines between a good, bad, and excellent credit score are drawn and how to increase yours if it is too low for achieving your financial and life goals.


  • Credit scores indicate how credit-worthy a person is and how they deal with debt and financial obligations. 

  • Having a good credit score gives you far better chances of securing loans and reaching your financial goals. 

  • Various factors influence your credit score, including payment history and how long you’ve had credit. 

  • In the US, the average credit score is 716 out of 850. 

How do credit scores work? 

Credit scores are numbers that represent a person’s creditworthiness.  

They are a simple, easy way for the government and other entities to summarize your credit and debt history at a glance. The higher your credit score is, the more likely you are to qualify for bank loans, mortgages, and credit cards.  

Your credit score is calculated using a formula that takes into account how well or poorly you have paid your bills in the past. The scoring system works in a numbered range of 300-850, with 300 representing the lowest and worst end of the spectrum and 850 representing the highest and best.  

The average credit score in America is 716.  

Managing a good credit score is essential for financial security and growth.  

What is considered a good credit score? 

Even though the average credit score for a US citizen is 716, you only need to have a score of 690 for it to be considered “good.”  

See the credit score chart summarized below:  

300-629 630-689 690-719 720-850

A good credit score is considered anything north of 690.  

Once you surpass 720, your credit score will fall into the “excellent” category, thus qualifying you for better loans, mortgages, and credit card arrangements.  

Do I have a good credit score? 

Many factors influence a person’s credit score result.  

If you are still not sure whether you have a good credit score, you can use a credit score calculator.  

A financial advisor can also help you find out which category your score falls into and how you can improve it to achieve your financial goals.  

Why is it important to have a good credit score? 

Having a good credit score opens many doors on personal and professional levels.  

When applying for any significant loan, fund, or investment, one of the first things any institution will do is check your credit score for any shortcomings.  

A good credit score can help you achieve a number of financial advantages: 

  • Unsecured credit card 

  • Good car loans  

  • Mortgage with a good interest rate 

  • Better rental deals 

What affects my credit score? 

There are multiple factors that influence how a person’s credit score is determined.  

While the specifics of what will affect your credit score can vary depending on what you are applying for or who is assessing your score, the most prominent factors that affect it include: 

  • Payment history: Institutions want to know what your track record is with debt repayment. The more efficient you are at paying bills and meeting tax deadlines, the higher your score will be.  

  • How long you’ve had credit: A long credit history allows for more payment data to be processed and a more rounded, accurate credit score to be determined. This can be attractive to institutions that are looking for more experienced credit score holders.  

  • What credit types you accessed in the past: Not all credit is the same. For instance, credit card credit is different from home loan credit. Your score is affected by which types of credit you have historically obtained.  

  • How frequently and recently you’ve applied for credit: If you apply for too many credit options too fast, you may not have a good credit score.  

How to get a good credit score 

There are a few ways to keep a good credit score.  

Whether you are working your way up from a low score or seeking to maintain a high one, here are a few steps you can follow to stabilize a healthy credit record: 

1. Pay your bills punctually  

One of the simplest and most effective ways to keep your credit score above 690 is to stay out of debt by paying your bills and making sure there are minimal outstanding balances on your account by the end of each fiscal year.  

2. Maintain a credit utilization rate below 30% 

High utilization of your credit card implies reckless spending. Keeping your utilization rate under 30% demonstrates that you make responsible financial decisions that may warrant more credit in the future.  

3. Keep your credit accounts open  

Although keeping old credit accounts open can lead to residual fees and poor service, doing so does come with the benefit of keeping the average of your account balances high. If you can afford to keep old credit accounts open, the pros outweigh the cons.  

4. Stretch out your credit applications  

Don’t apply for multiple credit options at once. Space out your applications to allow yourself ample time to repay each one and showcase your ability to do so.  

5. Monitor your credit reports  

If you have a financial advisor or personal accountant, you can gain valuable insights into your credit history and habits in the form of regular credit reports. Monitoring these credit reports can help you identify weak areas in your credit history and make necessary adjustments along the way.  

Seek expert financial advice 

Understanding how credit scores work and where yours fall on the spectrum of good to bad is essential for securing your financial position and reaching your future goals.  

You can get expert advice and work towards improving your credit score for better financial opportunities.  

To find out more about good credit scores, loan applications, or any finance-related affairs, let Unbiased match you with a financial advisor.  


Unbiased team

Our team of writers, who have decades of experience writing about personal finance, including investing and retirement, are here to help you find out what you must know about life’s biggest financial decisions.