An excellent credit score will give you the best pricing and the most favorable terms on any loan you apply for. Find out what exactly an excellent credit score is, and how to get one.

When it comes to credit scores, you often hear the terms “excellent”, “good”, “fair”, or “poor” scores. But what exactly do those terms mean?

When uttered by consumers, they tend to be subjective. Someone who has recently increased her credit score from 650 to 700 might describe her credit score as “excellent”.

But is that the way lenders see it? And is there an official definition of an excellent credit score?

As it turns out, there are general parameters for what can be loosely described as an excellent credit score. But credit bureaus and lenders do have their own standards. Those can vary from one institution to the next, so it’s not always helpful to lock into one lender’s definition.

But one thing most of us do know is that an excellent credit score is a golden key that can open a lot of doors. Not only can it get you the financing you want, but will also help you to get the lowest interest rates and the largest loan amounts.

What do the credit bureaus consider to be an excellent credit score?

What Is An Excellent Credit Score? - What do the credit bureaus consider to be an excellent credit score?

According to Experian (the largest of the three major credit bureaus), credit score ranges in each category are as follows:

Excellent 781-850
Good661 - 780
Fair601 - 660
Poor500 - 600
Very Poor300 - 499

At least according to Experian, excellent credit requires a credit score of at least 781. Unfortunately, according to Experian, only 23% of consumers fit into that range.

What do lenders consider an excellent credit score? 

Apart from the definition of excellent credit by any credit bureau, the classification is most relevant as lenders apply it. After all, they’re the ones who will make your credit decisions, and what they consider to be an excellent, good, fair, or poor credit score is what will matter most. 

Definitions of an excellent credit score will vary by lender, and even by loan type.

For example, one lender may consider an excellent credit score to be 750 or above. Another may use a score of 720.

But apart from your credit score, lenders also look at what makes up your credit. For example, even if your credit score is above 750, a lender may not consider you to have excellent credit if you have a bankruptcy or foreclosure in your past.

The type of loan you’re applying for can also make a difference. While a credit card lender may consider a minimum credit score of 750 to be excellent, an auto loan lender may set the limit at 700. In either case, the respective score level will entitle you to that lender’s best rates and terms.

Finding out what credit score or credit history qualifies as excellent for any particular lender isn’t always easy. Many don’t publish specific credit score requirements, preferring to emphasize credit quality, like no bankruptcies, foreclosures, or 60-day late payments.

Others are completely silent, preferring to make that determination only upon reviewing your application.

Related: Best Personal Loans For Excellent Credit

Why it’s so important to have excellent credit

There are two primary reasons for having a good or excellent credit score: 

  1. To get approved for financing.
  2. To get the best rate and terms available.

A third reason is applying for apartments or jobs. Landlords and rental management companies routinely check credit scores to determine your eligibility for a lease. Meanwhile, checking credit scores has become routine with job applicants. Many employers will require a good or excellent credit score for you to be eligible for certain jobs. 

But for the purposes of this guide, I’ll center the discussion on how credit scores – particularly excellent credit scores – affect your ability to obtain financing.

Most lenders impose a minimum credit score for applicant eligibility. That will vary depending on the industry and the lender.

For example, the minimum credit score for conventional mortgage lending is 620. If you’re applying for a car loan, the minimum may be 650. If your score isn’t at least that high, you may be referred to a subprime auto lender charging double-digit interest rates. And it can be difficult to get a traditional credit card with a score below 650. Some credit card lenders set the threshold even higher, such as 680 or even 700.

Related: Best Credit Cards If Your Credit Score Is Above 750

And that’s just to get approved. The rate you’ll pay, and the terms you’ll be offered will improve with a higher credit score, and the very best rates and terms will be reserved for those with excellent credit scores.

The effect of excellent credit on mortgages

Let’s start with mortgage loans since they’re something of a bellwether for the entire lending industry.

The image below, from, shows the effect of credit scores on the interest rate and monthly payment you’ll have with a $200,000, 30-year fixed-rate mortgage:

What Is An Excellent Credit Score? - Credit score's impact on mortgages


Notice that the bottom credit score range, 620 – 639, will pay an average interest rate of 4.245%, with a monthly payment of $983. 

But applicants in the excellent credit score range, 760 – 850, will pay just 2.656%, with a monthly payment of $807. That’s a savings of $176 per month, based on a 140-point improvement in the applicant’s credit score.

But also notice the column on the far right, Total Interest Paid. The borrower with excellent credit will pay $90,361 in interest over the life of the 30-year loan. The borrower in the lowest acceptable credit score range will pay $153,986.

The borrower with an excellent credit score will save $63,625 over the life of the loan. Even though that’s spread over 30 years, that’s real money.

The effect of excellent credit on credit cards

The situation is even more pronounced with credit cards. Not only are the minimum credit requirements higher (again, 650 is a typical minimum), but the interest rate you’ll pay on the card will be closely tied to your credit score.

For example, the Chase Sapphire Preferred® Card requires a minimum credit score of 750 just to be eligible for the card. That means only those with excellent credit need apply. 

In another credit card example, the Citi® Double Cash Card – 18 month BT offer requires a score of just 700. However, the regular interest rate ranges between 16.99% - 26.99% (Variable) APR. An excellent credit score, one greater than 750 or even 800, is more likely to fetch you the lower rate. 

The effect of excellent credit on personal loans

If you’ve looked into personal loans in the past, you may be at least remotely aware that interest rates can range from a low of 5.99% to a high of 35.99%. The personal loan aggregator, Credible, even advertises rates starting at 4.99% APR (with AutoPay), See Terms*.

What are the factors that make up your credit score?

What Is An Excellent Credit Score? - What are the factors that make up your credit score?

According to, your scores are based on the following five factors: 

  • Payment history (35%). This is your payment history on all outstanding credit over the past seven years or longer.
  • Amounts owed (30%). This is how much you owe in relation to your total credit limits. It’s not a fixed dollar amount for all consumers.
  • Length of credit history (15%). This measures the length of time you’ve had credit over multiple credit accounts.
  • Credit mix (10%). This looks at the different types of credit you have. Those with a mortgage, an installment loan, and credit cards will score higher here than those with a single type of credit.
  • New credit (10%). This focuses on credit acquired within the past year. Too much new credit can lower your credit score because it lacks a measurable track record.

While it may be tempting to figure out how to manipulate each and every factor, it’s not nearly that easy. The algorithms used by the credit bureaus to calculate your credit scores measure these factors collectively. For example, too much new credit combined with high balances owed can produce a low credit score, even if you have a perfect payment history. 

FICO Score vs. VantageScores

There are many different credit scoring models, apart from FICO scores. Some are even proprietary scores developed and used internally by individual lenders. 

But one of the most popular alternative credit scores is VantageScore. These scores are commonly used in providing free credit scores, though they’re seldom used by lenders in making loan decisions. 

Related: How To Get A (Really) Free Credit Report & Credit Score

If you’ve ever experienced a situation where a lender provided a credit score that was different, or lower, than your free credit score, it’s almost certain that the lender used your FICO score, while you have access to the free VantageScore.

And to thicken the plot, VantageScores also come in several versions. Currently, that includes VantageScores 1.0, 2.0, 3.0 and 4.0. 

I’ve already covered the factors used in computing FICO scores. Below are the factors used in computing VantageScore 4.0:

 What Is An Excellent Credit Score? - Factors that make up VantageScores 4.0


As you can see, VantageScore gives greater weight to credit usage and credit mix, and less to payment history. That being the case, someone with a few late payments may have a better VantageScore than FICO score. In some cases, the difference can be 50 points or more.

With all the different versions of credit scores, including the many FICO and VantageScore versions, getting an accurate read on your credit score is like trying to pin down a moving target. 

How to improve your credit score

What Is An Excellent Credit Score? - How to improve your credit score

I’m guessing that in coming to this article, you’ve got more on your mind than just what is an excellent credit score? You’re probably at least equally concerned with how you can go from your current credit score to an excellent credit score, assuming you’re not there already.

Related: 17 Expert Hacks To Achieving A PERFECT Credit Score

If so, the following strategies will help to improve your credit score: 

Pay your bills on time 

This suggestion is so obvious that it hardly qualifies as a strategy. But there may be more involved with paying your bills on time than you realize.

Most consumers are aware they need to pay their loan and credit card payments on time. Those are certainly the most common credit entries on your credit report, and the ones that carry the most weight. But there are other financial obligations that can also turn into derogatory credit entries.

For example, even though rent payments, utility bills, and phone and cable/Internet bills don’t appear on your credit report in the normal course, they will appear if you close your account with a charge-off or a collection account.  

This makes a strong case for paying all your financial obligations on time. It’s not just the credit accounts you think will show up on your credit report, but also any obligations that close on an unhappy note.

Dispute incorrect information

According to the Federal Trade Commission (FTC), one in every four consumers have errors on their credit reports that might affect their credit scores. If you’re trying to achieve an excellent credit score, the last thing you need is an error driving your score down.

To find out if there are any errors on your credit report, you’ll need to get a copy of the report. This is when it’s important to understand that you don’t have one credit report, but three.

That’s because there are three credit bureaus, Experian, Equifax, and TransUnion. Each issue a credit report in your name, with an attendant FICO score. Because not all creditors report to all three bureaus, the information between the three reports can contain variations. The only way to get a complete picture of your credit status is by getting a copy of all three credit reports.

You can do this through a website known as It’s the only source officially authorized to provide you with a copy of your credit report from each of the three credit bureaus. Fortunately, you’re entitled to one free copy of each credit report every year.

Related: Find An Error On Your Credit Report? Here’s How To Dispute It


I hope what you’re taking away from this guide is that an excellent credit score doesn’t just happen. It takes careful planning, a big helping of restraint, and regular monitoring. Patience is also a virtue since it will take several years to go from where you are now to an excellent credit score. 

But rest assured, the time and effort will be well spent. Excellent credit scores not only give you access to the financing you want, but you’ll also get you the most favorable pricing and terms. And they can even be a deciding factor in the next job or apartment you apply for. 

Use the strategies outlined in this guide, and you’ll have an excellent credit score in no time.

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About the author

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Since 2009, Kevin Mercadante has been sharing his journey from a washed-up mortgage loan officer emerging from the Financial Meltdown as a contract/self-employed “slash worker” – accountant/blogger/freelance web content writer – on Out of Your He offers career strategies, from dealing with under-employment to transitioning into self-employment, and provides “Alt-retirement strategies” for the vast majority who won’t retire to the beach as millionaires. He also frequently discusses the big-picture trends that are putting the squeeze on the bottom 90%, offering work-arounds and expense cutting tips to help readers carve out more money to save in their budgets – a.k.a., breaking the “savings barrier” and transitioning from debtor to saver. He’s a regular contributor/staff writer for as many as a dozen financial blogs and websites, including Money Under 30, Investor Junkie and The Dough Roller.