So, What’s the “Good” Number Everyone Talks About?
Alright, let’s get right to it. When people talk about “a good score,” they are almost always referring to the FICO score, the model used by 90% of top lenders.
For the most common FICO scores (which range from 300 to 850), the “good” credit score range is 670 to 739.
Here’s the general breakdown you’ll see from FICO:
- Exceptional: 800 – 850
- Very Good: 740 – 799
- Good: 670 – 739
- Fair: 580 – 669
- Poor: 300 – 579
But… (and this is a big “but”) the score you see for free on an app like Credit Karma is probably not your FICO score. It’s most likely a VantageScore.
VantageScore is a competing model created by the three big credit bureaus (Experian, Equifax, and TransUnion). It also uses the 300-850 scale, but it groups its “good” differently.
Here’s a quick comparison of the two most common models. This right here is the source of 90% of the confusion.
VantageScore
| Rating | FICO® Score 8 | VantageScore® 3.0 |
| Exceptional | 800-850 | 781-850 (Excellent) |
| Very Good | 740-799 | N/A (Part of Excellent) |
| Good | 670-739 | 661-780 |
| Fair | 580-669 | 601-660 |
| Poor | 300-579 | 300-600 |
Look at that. A score of 665 is considered “Fair” by FICO but “Good” by VantageScore. This is why you can’t just fixate on the label.
So which one actually matters? The one the lender uses. And that is overwhelmingly FICO. My advice is to use your VantageScore as a guide—if it’s going up, your FICO score probably is, too. But the FICO score is the one that will actually get you the mortgage.
(As a quick side note, this 300-850 range isn’t universal. In India, for example, the dominant CIBIL score ranges from 300 to 900, and a “good” or “excellent” score is generally considered to be 750 or higher).
Here’s a little secret to calm your nerves: the average FICO score in the U.S. in 2023 was 715. Look at the chart again. That’s right in the middle of the “Good” range.
You don’t need a “perfect” 850 score. You don’t even need to be “Exceptional.” To get good rates and approvals, you just need to be “Good.” Being perfectly, wonderfully average is… well, it’s good enough.
Why Your 720 Score Doesn’t Mean You’ll Get the Loan
This is the next layer of the onion, and it’s where people get really frustrated.
Let’s say you’ve done everything right. You check your FICO score and it’s a 720. Solidly “Good.” You walk into the car dealership, brimming with confidence, and apply for a loan… only to be denied. Or worse, you’re offered a terrible interest rate.
What happened?
You’re not wild. The system isn’t “broken.” You just weren’t being shown the real score.
The “base” FICO score (the 720 you saw) is not the only score lenders use. FICO creates “industry-specific credit scores” for credit card issuers and auto lenders.
When you apply for that car, the dealer pulls a FICO® Auto Score. This is a different product. It often uses a different range, like 250 to 900. And more importantly, it weighs factors differently. It’s designed to specifically predict the risk on a car loan, so it pays much more attention to how you’ve handled past car loans than how you’ve paid your credit card.
And it gets even more complicated. On top of that, the lender may have their own “custom score”. This model takes your FICO Auto Score and mixes it with their data: your income, how long you’ve been at your job, how long you’ve lived at your current address, and their own “appetite for risk”.
The score you see on your app is a guide. It’s your base level. The real score is the one the lender pulls, which is tailored to their specific risk, and which you, the consumer, almost never get to see.
What Does a “Bad” Score Actually Feel Like?
Let’s move away from the abstract numbers and talk about real life. What does it actually mean to have a “Poor” score, say, in the 300-579 range?
It’s not just a number. It’s a very expensive and stressful way to live.
Scenario 1: The Apartment Hunt.
You find the perfect apartment. You apply. The landlord or management company will run a credit check. To them, a low score is a massive red flag that you might struggle to pay rent. Many landlords look for a score of 600 or higher.
If your score is in the 500s, you’re likely getting denied.
I once read a heart-wrenching post on a forum from someone who said, “I just spent $150 on application fees for an apartment just to be denied”. That’s $150 gone, just to be told “no.” Another person with “terrible credit” said they “narrowly avoided homelessness” and the only way they got a place was by finding a private landlord who was willing to approve them based on a phone call, no check required.
That’s the real-world cost. It’s not just a denial; it’s housing insecurity.
Scenario 2: Getting the Lights Turned On.
This is the one that shocks most people. When you move into that new apartment (if you can get it) and call to set up electricity, water, and gas, you are applying for credit.
Why? Because the utility company is giving you their service before you pay the bill. They are extending you credit.
So, they run a credit check (a “soft pull,” which doesn’t hurt your score). If they see a low score, they see you as a risk. They will demand a security deposit just to turn on your power. This can be $100, $250, or more. Or, in some cases, they’ll demand you find a friend or family member with good credit to sign a “letter of guarantee,” vowing to pay your bill if you don’t. How humiliating is that?
Scenario 3: The Car Loan Nightmare.
This is where the math gets brutal. It’s not just “higher interest rates”; it’s what I call the “Bad Credit Tax.” A low score doesn’t mean you can’t get a car loan (auto loans are often easier to get because the car itself is collateral). It just means you will pay an astronomical price for it.
Let’s look at the numbers for a 5-year, $25,000 used car loan, based on data from the second quarter of 2025.
| Credit Score | Rating | Average APR | Monthly Payment | Total Interest Paid | The “Bad Credit Tax” (vs. Superprime) |
| 781-850 | Superprime | 7.15% | $501 | $5,060 | $0 |
| 661-780 | Prime | 9.39% | $528 | $6,680 | +$1,620 |
| 501-600 | Subprime | 18.90% | $655 | $14,300 | +$9,240 |
| 300-500 | Deep Subprime | 21.58% | $692 | $16,520 | +$11,460 |
Look at that. Just… look at it.
The person with the 550 score pays $14,300 in interest. The person with the 800 score pays $5,060. That is over $9,000 extra for the exact same car.
This is the cycle of debt in action. That $9,000 is money that cannot be used to build an emergency fund, pay down other debt, or invest. A bad credit score keeps you poor. It is a massive financial penalty for already having financial problems.
On the Flip Side: The Secret Perks of the 800+ Club
So, what about the other end? What does being in the “Exceptional” 800+ club get you?
It’s not just about getting “yes” on your applications. It’s about getting a financial discount on life.
The obvious perks are clear: you get the absolute best mortgage rates, which can save you tens of thousands over 30 years. You get those 0% “sign and drive” car deals. You get approved for the premium travel credit cards with massive sign-up bonuses and lounge access.
But the real perks are the ones people don’t talk about.
Secret Perk #1: Lower Insurance Premiums.
This is the big one. In many states, your auto, home, and even health insurance premiums are tied to a credit-based insurance score. Why? Because insurance companies are obsessed with statistics, and their data shows a high correlation between high credit scores and… fewer filed claims. They see you as less of a risk, so they give you a discount.
Secret Perk #2: No Deposits, Ever.
Remember that $250 deposit to turn the lights on? Waived. That apartment you’re renting? They might waive the security deposit entirely as an incentive for a high-quality tenant.
Secret Perk #3: The Power Dynamic Flips.
This is the most satisfying part. With an 800+ score, you have “Increased Negotiating Power”. You are no longer begging a bank for a loan. They are competing for you. You are a low-risk, high-profit customer. You can literally call your credit card company—the one you’ve had for 10 years—and say, “Your competitor just offered me a card with a lower APR. I’d like to stay with you, but can you match it?”. And more often than not, they will.
Worse Than a Bad Score: Being a “Credit Ghost”
There is one situation that can be even more frustrating than having a bad score: having no score at all.
You are a “credit ghost”.
There are 26 million Americans in this boat, “credit invisible”. This group includes young people just starting out, immigrants new to the US financial system, and—most frustratingly—people who have been incredibly responsible by paying for everything in cash their entire lives.
I read a perfect anecdote about a woman named “Sarah”. She was proud of having no debt and always used cash. She thought she was being the model of responsibility. But when she went to buy a car, she “wanted the lowest interest rate.” The dealer pulled her file and found… nothing. Zilch.
She wasn’t denied because she was a bad risk. She was denied the best rate because she was an unknown risk.
Here’s the truly bizarre part: having no credit can even make it harder to get a job. Many employers run a credit check as part of the hiring process. The (flawed) logic is that a person’s financial management is a proxy for their “character” or that someone in financial distress might be a higher risk for theft.
This is the ultimate “catch-22” of the credit world. The system punishes you for not playing the game. You have to use credit (and go into debt) to prove you’re good with… credit.
How You Build This Thing From Scratch (Without Making a Mess)
Okay, so you have to play the game. You’re a credit ghost or you’re rebuilding from a “Poor” score. How do you start?
Method 1: The Secured Card “Graduation.”
This is the number one tool, hands down. A “secured” credit card means you give the bank a deposit, and that deposit becomes your credit limit. You give them $200, you get a card with a $200 limit. It’s a starter card with training wheels.
This isn’t a “bad” card; it’s a tool. You use it for one small, recurring bill—like Netflix or Spotify—set it to autopay from your bank account, and put the card in a drawer. After 6-12 months of perfect payments, you “graduate.”
Real users have shared their stories. One said: “I used this card to rebuild my credit… and they just upgraded me to a non-secured card after 6 months”. Another: “Started off with a $200 secured card and was upgraded to $1500 unsecured within 7 months”. This proves it’s a clear, reliable path.
Method 2: The “Authorized User” Hack.
This is what some call “rocket fuel” for a credit score. Here’s how it works: Your parent has a credit card they’ve had for 20 years with a perfect payment history and a low balance. They call their card company and add you as an “authorized user.”
The magic? That entire 20-year account history, with its perfect payments and high limit, often gets copied onto your brand-new credit report. Your score can jump 50+ points almost overnight.
But it’s a rocket, and rockets can explode. It’s a strategy that can “wind up biting you”. You are hitching your wagon to someone else. If your parent (the primary user) suddenly runs up a 90% balance or, worse, misses a payment, your credit score gets “dragged down” with them. You are linking your financial fate to theirs.
Method 3: The One to Avoid… Co-Signing.
This is where I stop being neutral and give you my strongest possible advice: Do. Not. Co-Sign. For. Anyone.
The term “co-signer” is a dangerous lie. It sounds like you’re a “co-pilot” or a “backup.” You are not. You are a “co-borrower.” The only reason the bank is approving the loan is because of you. They have already determined the primary applicant is a bad risk.
When you co-sign, you are 100% “responsible for the entire amount” of the loan, but you get 0% of the asset (you don’t get the car, or the degree, or the dental work).
The horror stories are endless. One person on Reddit shared how they got “burned twice”. The second time, their ex was having “major dental issues” and was in “constant pain.” Co-signing for Care Credit seemed like the kind, compassionate thing to do. The relationship ended, and the author was “left holding the bag” for the entire bill.
Another person told the “what if” story. His dad begged him not to co-sign his friend’s law school loan. He listened, and the “friendship was never the same.” A decade later, he found out the friend had defaulted. “Debt collectors are pounding on his door, taking his car, garnishing wages.” If he had signed, “those debt collectors would be coming after me.”
Don’t do it. The only time to even consider co-signing is if you are fully prepared to gift the entire loan amount and are okay with the relationship probably being ruined.
Weird Things That Tank Your Score (That No One Explains)
This is my favorite part. The system has some truly counter-intuitive rules that trip everyone up.
#1 Mystery: The “Snapshot” Problem.
- The Scenario: You have a $1,000 limit. You buy a new laptop for $900. You get paid two weeks later and pay the $900 in full before the due date. You paid zero interest. You are a responsible adult. But you check your score, and it plummeted 30 points. Why?!
- The Explanation: Your credit score is a “snapshot”. Your card issuer reports your balance to the bureaus on your statement date, not your due date. On that statement date, your balance was $900 (a 90% “utilization”). The bureaus don’t know you paid it off a week later. They just see a “snapshot” of a nearly maxed-out card, which screams HIGH RISK.
- The Fix: If you’re making a large purchase, pay it down before your statement date.
#2 Mystery: The “Paid-Off Loan” Paradox.
- The Scenario: You just made the final payment on your car loan. You do a “debt-free” dance! You check your score… and it dropped 20 points. This feels like a punishment for doing the right thing.
- The Explanation: It’s all about “Credit Mix,” which makes up 10% of your FICO score. Lenders like to see that you can responsibly handle both kinds of debt: installment loans (like a car or student loan, with set payments) and revolving credit (like credit cards). When you paid off that car loan, you may have just closed your only open installment loan. Your “mix” is now less diverse, so your score takes a small, temporary dip. It’s annoying, but it’s not permanent.
Mystery #3: The Old Card You Never Use.
- The Scenario: You’re cleaning out your wallet. You find that first starter card you got 10 years ago. You never use it. You decide to “tidy up” your finances and close the account.
- The Explanation: This is a massive mistake. “Length of Credit History” is 15% of your score, and it’s based on the average age of all your accounts.
- The Math: Let’s say you have that 10-year-old card and a 2-year-old card. Your average age of accounts is 6 years ($10+2 / 2 = 6$). If you close the 10-year-old card, your average age plummets to just 2 years. Your score will drop, and that damage lasts.
- The Fix: As long as it doesn’t have an annual fee, keep it open. One expert said to “hide it in your sock drawer” and use it to buy a coffee every six months just to keep the issuer from closing it for inactivity.
Mystery #4: “Hard” vs. “Soft” Inquiries.
- Soft Inquiry: This is you checking your own score on an app, a company sending you a “pre-approval” offer in the mail, or an employer checking your credit. Impact: ZERO. You can check your own score 100 times a day. It will not hurt you.
- Hard Inquiry: This is you formally applying for a new credit card, a loan, or a mortgage. Impact: A small, temporary drop of a few points. The model is smart about “rate-shopping,” though. If you apply for 10 different car loans in a 30-day window, it sees that as one shopping event and only dings you once.
Okay, I Messed Up. Is It Permanent?
Let’s say you did mess up. You missed a payment. It was 8 months ago, you were going through a tough time, and that one late mark is dragging your score down. You don’t have to just “wait seven years” for it to fall off.
There’s a little-known fix you can try: the “Goodwill Letter”.
This is NOT a dispute. A dispute is when you claim an item is an error (“I never missed that payment!”). A goodwill letter is for accurate marks. You are admitting, “Yes, I missed that payment, and I am humbly asking for forgiveness”. You are asking the creditor to make a “goodwill adjustment”.
Here is how you write one that might actually work:
- Be Polite and Professional. This is a formal, typed business letter, not an angry email.
- Accept Fault. This is the most important part. “I am writing to you today about my account… I take full responsibility for the late payment on”.
- Explain the Circumstance (Briefly). Don’t write a novel. Be concise and human. “This occurred during an unexpected medical emergency” or “a job loss” or “I had just moved and my mail was not forwarding correctly”.
- Show Your Loyalty and Improvement. “I have been a loyal customer for [X years]… Aside from this one incident, I have a history of on-time payments. I have since set up autopay to ensure this never happens again”.
- Make the Clear Request. “I am respectfully asking if you would consider making a ‘goodwill adjustment’ to remove this single late payment from my credit reports”.
Will it work? Maybe. Some giant banks have a policy of saying no, claiming (somewhat dubiously) that they are legally obligated to report 100% accurate data. But many anecdotes in online forums show that it does work, especially with smaller creditors or credit unions. You are appealing to the business relationship, not the data point. It costs you one stamp to ask.
The Secret Scores
After all this—the secret scores, the paradoxes, the penalties—you might be more stressed than when you started. It all seems so complicated.
So let’s end with the simple part.
The most popular FICO model is built on five factors, but they are not weighted equally:
- Payment History: 35%
- Amounts Owed (Credit Utilization): 30%
- Length of Credit History: 15%
- New Credit: 10%
- Credit Mix: 10%
Look at that again. 65% of your entire score comes from just two things: 1. Do you pay your bills on time? and 2. Do you keep your credit card balances low?.
We get obsessed with the “hacks”—the credit mix, the new inquiries, the age of our accounts. But that’s all just optimizing the last 35%. The entire game is won or lost on those first two rules.
My final piece of advice? Stop obsessing over the three-digit number. It’s just a lagging indicator of your habits. It’s the smoke, not the fire.
Focus on the habits. Pay your bills on time, every single time. Keep your credit card balances as low as humanly possible (and pay them in full every month).
Do those two things, and your score—all your scores, even the secret ones—will take care of itself. That’s the only “simple explanation” that really matters.
