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Credit Score Ranges: What They Mean and How They Work

Credit Score Ranges: What They Mean and How They Work

Your credit score holds the key to financial opportunities. Here's what you need to know.

Written by

June 12, 2025

Credit scores are categorized into ranges that go from "poor" up to "excellent." The range your credit score falls into can help creditors decide whether to approve or deny your credit applications – and can even determine what interest rates you end up paying.

This is especially true when you're considering our best debt consolidation loans, which often require specific credit score thresholds for optimal terms. For these reasons, it's a good idea to understand the credit score ranges and what they mean, as well as where your score lands.

Key Insights

Credit scores (300-850) determine loan approvals and rates, with higher scores securing better terms.
Payment history most impacts credit scores, followed by debt, history length, mix, and new applications.
FICO scores range from Poor (300-579) to Excellent (800-850), with lower scores facing fewer options.
Pay bills on time, keep utilization under 30%, and maintain old accounts to improve your credit score.

What Is a Credit Score and How Do Lenders Use Them?

Your credit score is a three-digit number, ranging from 300 to 850, that summarizes your creditworthiness. This score affects your ability to take out loans, open credit cards, and secure other forms of credit.

"A credit score is a numerical summary of your credit history, reflecting your reliability as a borrower," says Karl Threadgold, accountant (ACMA, CGMA) and managing director at Threadgold Consulting.

"Lenders use this score to assess risk, determine whether to lend money, what interest rates to offer, and what credit limits to assign. Essentially, it indicates how likely you'll repay borrowed funds based on your past financial behavior."

Factors That Determine Your Credit Score

Credit scores get calculated using the information in your credit reports, supplied by the three major credit bureaus: Equifax, Experian, and TransUnion. The factors that determine your credit score include:

Payment history: Your history of paying your bills on time is the most important factor influencing your credit score. If you make all your debt payments in full by the due date every month, your credit score will grow. But late payments can significantly lower it.
Debt balances: The total amount you owe affects your credit score, as well as the amount of available credit on revolving accounts, such as credit cards, that you currently have tied up with outstanding balances.
Length of credit history: The longer your history of having credit, the better it generally is for your score. Credit scoring models look at the age of your accounts to determine how long you've been managing credit.
Credit mix: Having different types of credit, such as installment credit with fixed payments (e.g., mortgages or auto loans) and revolving credit with variable payments (e.g., credit cards or personal lines of credit), can benefit your score.
New credit: Credit scoring models may lower your score a few points if you have recent applications for new credit. However, you shouldn't see much long-term damage, especially if you're rate shopping for the same type of loan over a short period.

Many lenders won't work with subprime borrowers whose scores fall in the "poor" or "fair" ranges. Better credit scores typically mean lower interest rates and more financial opportunities.

What Are the Credit Score Ranges?

For our purposes, we'll use the FICO credit score ranges, as it's the most commonly used credit scoring model:

Excellent

Range: FICO score of 800 to 850
What it means for you: If you have a credit score in this range, you're considered among the lowest-risk borrowers. You should have little trouble qualifying for loans, credit cards, and other types of credit. You'll also receive the best offers and qualify for the lowest interest rates.

Very Good

Range: 740 to 799
What it means for you: With a very good credit score, you can qualify for loans and credit accounts with most lenders. You'll receive strong offers and access very competitive interest rates, though you may not get the top-tier terms offered to borrowers with excellent credit.

Good

Range: 670 to 739
What it means for you: Good credit scores fall in the "middle" of the credit score ranges. You'll meet the minimum requirements for most lenders, meaning you can find loans or credit cards relatively easily.

Fair

Range: 580 to 669
What it means for you: Individuals with credit scores in the fair range and below are considered subprime borrowers, which means that lenders consider them higher risk. You can still qualify for loans and credit cards, but some lenders may not work with you at all.

Poor

Range: 300 to 579
What it means for you: With a poor credit score, you may struggle to qualify for loans and credit cards because many creditors won't work with you. Some lenders specialize in subprime borrowers, but you can expect to pay much higher interest rates.

Credit Score Ranges and Debt Consolidation Loans

Your credit score range can have a direct impact on the debt consolidation loans you can get. The most common type is a personal loan.

A personal loan lets you take a lump sum from a lender to pay off your debts (ideally with a lower interest rate), then make a single monthly payment to the new lender to pay off the loan over time.

Approval likelihood: Excellent, very good, or good credit scores typically ensure easy approval for personal loans. With fair or poor credit, you'll need to search specifically for debt consolidation loans for bad credit, as fewer lenders work with subprime borrowers.
Interest rate impact: Strong credit scores earn lower interest rates and monthly payments. Subprime scores mean higher rates, potentially increasing monthly payments and total loan costs.
Consolidation value: If you can't secure an interest rate lower than your current debts, consolidation may not be financially beneficial.

“There isn’t a one-size-fits-all credit score requirement for debt consolidation loans, but generally, the higher your score, the better the loan options available. If you have an excellent or good credit score, you are more likely to be approved for a debt consolidation loan with competitive interest rates and favorable repayment terms,” says Threadgold.

What Lenders Look For

To get the best terms for your debt consolidation loan, you will want to have the following:

Strong credit score: Most lenders require FICO scores in the 600s, with many mortgage lenders setting 620 as the minimum credit score, according to US Bank.
Sufficient income: Lenders will look at your income to ensure you make enough money to pay back your loan. You will need to submit proof of income during the application process.
Good debt-to-income (DTI) ratio: This percentage shows how much of your monthly income goes toward debt payments. Lower DTI ratios—ideally 36% or less demonstrate you have budget capacity for additional debt.

Improving Your Credit Score to Get a Debt Consolidation Loan

The better your credit score, the more likely you are to get your credit application approved. Plus, you can expect to see lower interest rates and save hundreds or even thousands of dollars in the long run. Take these steps to improve your credit score now:

Pay your bills on time: Make your payments on time and in full month after month. This is the most important thing you can do to build up your credit score.
Maintain low credit utilization: For your credit accounts that allow you to borrow up to a certain limit (credit card or a home equity line of credit), keep your balances low. It’s commonly recommended to use 30% or less of your available balances.
Keep old credit cards open: Unless you want to avoid expensive fees or you can’t get your spending under control, keep your old credit cards open, even if you don’t use them anymore. This contributes to the length of your credit history.

“Some specialized lenders cater to borrowers with lower scores, but these loans often come at a higher cost. Ultimately, your credit score plays a crucial role in determining both the availability and affordability of … loans, making it essential to improve your score before applying,” says Threadgold.

Bottom Line

Understanding your credit score is essential for making informed financial decisions, especially when exploring debt management options. By knowing where you stand and what factors influence your score, you can take steps to improve it over time.

Frequently Asked Questions

What is a good credit score?

A good credit score is a FICO score in the range of 670 to 739.

What is a bad credit score?

A bad, or “poor,” credit score is a FICO score in the range of 300 to 570.

How are credit scores calculated?

Credit scores are calculated using the information in your credit report. Credit scoring models look at factors that include your payment history, amount of debt and credit utilization, length of credit history, mix of credit types, and new credit.

Written byBrian Acton

Brian Acton is a seasoned personal finance journalist at BestMoney.com who specializes in loans and debt consolidation. His work has appeared in The Wall Street Journal, TIME, USA Today, MarketWatch, Inc. Magazine, HuffPost, and other notable outlets.