Credit Score: Everything you need to know in 2023

300 is the lowest credit score which reflects very poor credit management, while 850 is the highest credit score available. But what does it mean and how can you improve? Read on.
Credit Score: Everything you need to know in 2023
For FICO, it is your payment history and credit utilization ratio while for VantageScores, it is your credit use, its available credit and your credit mix. But what does your credit score mean?
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Taking care of your finances is very important because how you manage your money reflects on how well your credit situation is and in turn how your credit score is. But what does your credit score mean? A credit score is a three-digit number suggesting how creditworthy you are.

It lets the landers know your current financial situation and your behavior towards managing your finances. Lenders can use a credit rating agency such as the Fair Isaac Corporation (FICO) or VantageScores to approve your application for getting a credit card or a loan. 

Do you want to know what your credit score means and how it can affect the way you perceive your finances? We have got you covered. Let’s get into it. 

Credit score range

The credit score provided by VantageScores and FICO starts from 300 and reaches 850. 300 is the lowest score which reflects very poor management. While 850 is the highest score available. Though for various purposes, the score range can defer. For example, if you are applying for a mortgage, it can go for 2, 4, or 5. If you are applying for a specific type of credit then it can range from 250 to 900. The typical credit score range is 300 to 850. So, let us understand what this range actually means.

The average score in the United States 

As per the data provided by FICO, for the year 2020, the average US score was 711. While for the VantageScores, it was 688. Typically, for a majority of consumers, the average score is usually between 600 to 750. 

FICO Score

  • 800+ = Exceptional 
  • 740 to 799 = Very good
  • 670 to 739 = Good
  • 580 to 669 = Fair
  • Less than 579 = Poor


  • 781 to 850 = Excellent
  • 661 to 780 = Good
  • 601 to 660 = Fair
  • 500 to 600 = Poor
  • Less than 500 = Very poor

With time, even consumers have become aware of their credit scores and are trying to improve them by managing that effectively and maintaining a healthy credit utilization ratio.

What affects your credit score? 

This is a really interesting part because you can get to know that by using which type of credit, your score is highly impacted. I have listed credit utilization factors from FICO as well as VantageScores below. 


  • Payment history weighs 35 percent of the score.
  • Credit utilization weighs 30 percent of the score.
  • The age of credit weighs 15 percent of the score.
  • A credit mix weighs 10 percent of the score.
  • New credit inquiries account for 35 percent of the score.


  • Your total balance, credit usage, and credit availability
  • Credit experience and credit mix
  • Your payment history
  • New accounts
  • The age of your credit history 

How to improve your score 

You can get information related to your score for free by using After knowing your credit report, you can take steps that can help you improve your score and get better deals for credit products. 

A few of the most popular ways to improve your score are listed below. 

  • Diversify your credit including loans, lines of credit, and credit cards.
  • Have a lower balance on your credit card.
  • Have a habit of paying your bill in full each month. 
  • Do not apply for credit unnecessarily. 
  • Do not close your old credit accounts.

When you want to borrow funds, your credit score matters the most. As a result, it is very crucial that you maintain a good score. For building your score your credit history, income, debt transactions, assets, etc. play a very important role. If you are planning to buy a house, it is of utmost priority that you should increase your score. You should have a habit of paying your credit card bills on time. It is also advisable that you pay off the highest interest rate debt first because that will reduce your monthly outflows and you can get rid of your debt easily.

Frequently asked questions

How many credit bureaus provide credit scores? 

In the United State, there are three main credit bureaus namely TransUnion, Experian, and Equifax. Lenders are not required to provide credit information to all three bureaus so you may find different data in each of these credit bureaus. 

What is the lowest and the highest score in the US? 

As per FICO and VantageScores, the lowest score is 300 while the highest score is 850. In the US, the average score for 2020 was 711 for FICO and 688 for VantageScores.

Which factors weigh in more for defining a score?

Two of the biggest factors that affect your score as per FICO are your payment history and credit utilization ratio while for VantageScores, it is your credit use, its available credit, and your credit mix.

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Devanshee Dave

Devanshee Dave

With over 4 years of experience in financial writing and a master’s degree in mass communication & journalism, Devanshee is currently preparing for her CFA (Chartered Financial Analyst) exams. In her spare time, she likes to dance and learn about cosmology, astronomy and anything that can expand her knowledge from the big bang to the big crunch.

This page is purely informational. Beem does not provide financial, legal or accounting advice. This article has been prepared for informational purposes only. It is not intended to provide financial, legal or accounting advice and should not be relied on for the same. Please consult your own financial, legal and accounting advisors before engaging in any transactions.

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