A credit score is a three-digit number ranging from 300 to 850 that lenders use to gauge the probability you’ll repay a debt on time. The most widely used model is the FICO score. A score of 740 or above qualifies you for the best interest rates available on mortgages, auto loans, and credit cards. The national average FICO score was 713 at the close of 2025, the first annual decline since 2013, according to Experian, meaning the average American is solidly in “Good” territory but still short of the threshold where rates stop meaningfully improving.
FICO score ranges and what they mean
| Score range | Label | What it means in practice |
|---|---|---|
| 800–850 | Exceptional | Best available rates; instant approval on most applications |
| 740–799 | Very Good | Near-best rates; qualifies for premium cards and low-rate loans |
| 670–739 | Good | Approved for most loans; rates are competitive but not optimal |
| 580–669 | Fair | Higher rates; some lenders decline; limited card options |
| 300–579 | Poor | Difficult to get unsecured credit; secured cards or co-signers required |
As of late 2025, here is how the US population distributes across these ranges (Experian, September 2025):
| Score range | Share of Americans |
|---|---|
| Exceptional (800–850) | 22.8% |
| Very Good (740–799) | 27.5% |
| Good (670–739) | 20.1% |
| Fair (580–669) | 14.9% |
| Poor (300–579) | 14.7% |
Roughly 70% of Americans have a Good or better score. But 29.6%, nearly 1 in 3, sit in Fair or Poor territory, where credit costs significantly more.
What a score difference actually costs
The practical impact of a credit score is clearest with a mortgage, where even a fraction of a percentage point compounds over 30 years.
Example: $300,000 30-year fixed mortgage (April 2026 rates)
| Credit score range | Approximate APR | Monthly payment | Total interest over 30 years |
|---|---|---|---|
| 760–850 | ~7.24% | ~$2,041 | ~$434,760 |
| 700–759 | ~7.45% | ~$2,083 | ~$449,880 |
| 660–699 | ~7.62% | ~$2,116 | ~$461,760 |
| 620–659 | ~7.84% | ~$2,169 | ~$480,840 |
A borrower at 620 pays roughly $128 more per month than one at 760, $46,080 more over the life of the loan for the identical home and loan amount (myFICO / The Mortgage Reports, 2026). That gap is why improving from 620 to 740 is one of the highest-return financial moves available to most Americans. Getting from 740 to 800 produces a much smaller rate improvement.
The same pattern holds for auto loans and personal loans, though the absolute dollar amounts are smaller.
What makes up your FICO score
FICO publishes the breakdown of how each factor contributes to the score (myFICO):
| Factor | Weight | What lenders are evaluating |
|---|---|---|
| Payment history | 35% | Do you pay on time, every time? |
| Credit utilization | 30% | What percentage of available revolving credit are you using? |
| Length of credit history | 15% | How long have your accounts been open? |
| Credit mix | 10% | Do you manage both revolving (cards) and installment (loans) credit? |
| New credit inquiries | 10% | Have you recently applied for several new accounts? |
Payment history and credit utilization together account for 65% of the score. Both are directly controllable, and both can be improved within months.
How to raise your score: by time horizon
Within 30–60 days
- Pay down credit card balances. Utilization, your balance as a percentage of your credit limit, is recalculated each billing cycle. Getting from 60% utilization to under 30% can add 20–50 points relatively quickly. Below 10% is better.
- Dispute errors on your credit report. Fetch your reports for free from annualcreditreport.com (all three bureaus: Equifax, Experian, TransUnion). Errors, accounts that aren’t yours, late payments reported incorrectly, affect roughly 1 in 5 reports, according to a Federal Trade Commission study.
Within 3–12 months
- Make every payment on time, without exception. A single missed payment can drop a score by 50–100 points and remains on your report for seven years. Autopay for at least the minimum prevents this.
- Become an authorized user on a family member’s or trusted friend’s long-standing, well-managed card. Their account history gets added to your credit profile. This is the fastest legitimate shortcut for people with thin or damaged credit.
Over 1–2 years
- Keep old accounts open. Length of credit history is 15% of the score. Closing a card you’ve had for a decade shortens your average account age and can lower your score even if you never use the card. Keep it open with a small recurring charge (a streaming subscription, for example) to prevent the issuer from closing it.
- Add an installment loan if you only have revolving credit. A small personal loan or a credit-builder loan from a credit union improves your credit mix. The effect is modest (10% of the score) but real.
- Space out new credit applications. Each hard inquiry stays on your report for two years and can knock 5–10 points off your score. Applying for three new cards in the same month signals risk to lenders.
Where the average American sits: and the gap to cross
The national average of 713 sits in the Good range, but just below 740, the threshold where rates stop improving meaningfully. About 29.6% of Americans are below 670, where credit access becomes genuinely constrained.
The most common paths from Good (670–739) to Very Good (740+):
- Drop credit utilization below 10% across all cards
- Maintain a 12-month perfect payment streak with no misses or lates
- Avoid opening new accounts during the improvement period
- Dispute and resolve any negative items approaching their seven-year expiration
Most people who start in the 670–720 range and apply these consistently can reach 740 within 12–18 months.
How to check your score for free
- annualcreditreport.com, the official, federally mandated source for free full credit reports from all three bureaus, now available weekly
- Your credit card issuer, most major issuers (including Discover, Chase, and Capital One) show a free FICO score in your monthly statement or app
- Experian’s free account, provides your Experian FICO score, updated monthly
- Credit Karma or Credit Sesame, free VantageScore (a different model from FICO, typically tracks FICO closely but can diverge by 20–30 points in some cases)
VantageScore and FICO use the same 300–850 scale and similar factors, but they weight them differently. Most mortgage lenders use FICO specifically, so check your FICO score before any major loan application.
Where to aim
Target 740. Pay every bill on time, no exceptions, keep your card balances below 30% of their limits (10% if you’re actively trying to improve), and don’t close old accounts. Score improvement moves in months, not weeks, but it is entirely predictable: consistent behavior produces a consistently rising number. Check your score monthly, and review your full credit reports at least once a year for errors or unfamiliar accounts.