What is a Decent Credit Score? Essential Knowledge You Need To Know

man checking off list indicating what is a decent credit score

What is a Decent Credit Score?  Find Out Here.

Scratching your head trying to understand how your credit score is calculated and wondering even more what is a decent credit score?

Are you part of the majority of Americans who don’t know how their credit score is calculated? Are you clueless when it comes to determining whether or not you’ve got a good credit score?

If so, it’s time to get on top of your finances.

Read on to finally get an answer to the question “what is a decent credit score?”

We’re also sharing some practical advice to help you improve your credit and get on your way to becoming a money master!

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How Your Credit Score Calculated.

Before we answer the question “what is a decent credit score?” let’s talk about how your credit score is calculated.

Your credit score is based on data gathered from three different credit reporting agencies (CRAs) — Equifax, Experian, and TransUnion. Not all creditors and lenders report all three CRAs, so your score from each of them will often vary slightly.

These CRAs look at a variety of factors to determine your credit score, including the following:

  • The number and type of accounts you have
  • Your available vs. used credit
  • Length of your credit history
  • Payment history

Each factor carries a different amount of weight for your total credit score. A typical breakdown looks something like this:

  • Number of accounts: 10-12 percent
  • Type of credit used: 15 percent
  • Available vs. used credit: 30 percent
  • Length of credit history: 5-7 percent
  • Payment history: 35 percent

As you can see, there’s a lot that goes into calculating your credit score. It’s no wonder so many people are clueless.

What is a Decent Credit Score?

In addition to being confused about how their credit score is calculated, many people end up scratching their heads when they’re asked, “what is a decent credit score?”

If you’re in this boat, things are about to get a lot clearer for you.

Your credit score is a three-digit number that ranges from 300 to 850. Generally speaking, a score of 700 or higher is considered a decent score.

Most people won’t have trouble being approved for a loan or credit card if their score falls somewhere above 700.

If your score is below that, you can still qualify for loans and credit cards. But, your interest rate may be higher as a result.

Watch This Short Video From Experian to Learn More About What Is A Good Credit Score 


Tips for Improving Your Credit Score

Now you know the answer to the question, “what is a decent credit score?”

How does yours stack up? If your credit’s not where you’d like it to be, don’t worry.

Give these strategies a try to start improving it today.

credit card with dollar sign building blocks

Check Your Credit Report

Are you part of the 37 percent of Americans who don’t know what their credit score is? If so, your first step is obtaining a copy and finding out where you’re at.

There are many websites out there that will let you check your credit score for free.

in addition to learning your score, you can also check your report to make sure there aren’t any errors there that are negatively affecting you.

Once you notice an error, such as an incorrectly listed late payment, you can dispute it with the credit bureau and improve your score.

Reduce Your Debt

This is a lot easier said than done. But, reducing your debt is essential to improving your credit score.

wallet with tape measure

Some tips for reducing debt include:

  • Reduce your credit card utilization (your balance should be less than 30 percent of your limit)
  • Evaluate your budget and look for places where you can cut spending
  • Create a payment plan and prioritize paying off credit cards with higher interest rates
  • Pay off credit card debt completely rather than moving it from one card to another
  • Avoid opening new cards just to increase your available credit

It takes time to reduce debt. However, it’s definitely possible if you establish a manageable plan and stick with it.

Stop Missing Payments

You can’t change the past. But, if a poor payment history has contributed to your low credit score, make sure you’re doing the following things to avoid problems in the future.

One of the first things you can do is set up payment reminders so that you don’t forget when your bills are due. Many banks allow you to set up email or text reminders through their online portals.

You may also want to set up automatic payments so that you don’t have to worry about missing due dates.

There are a lot of misconceptions out there about late payments.

For example, many people believe that payments that are just a few days late don’t affect credit scores. Other think that paying off collection amounts remove them from your credit report. In reality, though, those amounts stay on your report for seven years!

If you’re having a hard time making your payments, try to contact your creditors to talk about reducing your monthly payments. You can also look into working with a credit counselor.

These steps won’t automatically improve your score. But, they’re still a step in the right direction.

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Consider Refinancing Your Student Loans

If student loan debt is negatively affecting your credit score, you may want to look into refinancing.

Refinancing doesn’t eliminate your student loans altogether.

But, it will reduce your interest rates and help give your score a boost over time.

Limit Your Applications

Many retail stores will offer you a discount if you sign up for a store credit card. But, you should resist the urge to take them up on this deal. This is especially true for people who are trying to repair their credit.

Every time you apply for a card, your credit takes a hit, whether you’re approved or not.

The hit is small, about 3-5 points. But, it can still have a big impact on your score, especially if you’re on the edge of two credit score tiers or have applied for a lot of cards in a short period of time.

Learn More

You now have an answer for when someone asks you “what is a decent credit score?”

Want to become even more financially savvy?

Subscribe to our newsletter today so you never miss out on new tips and tricks for improving your credit and managing your finances!

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  1. This is so important to know that I think that it should be taught in our schools at the high school level. It’s amazing how only 4-5 states make financial literacy mandatory but almost, if not all, make sex education mandatory.

    We end up with a large population that knows how to make babies but not how to take care of them financially. This is one huge component of that.

    Great article and thanks for posting!

    • I think you are completely correct on this one.  Understanding personal finance is a must have in today’s world.  

      Starting our kids off the right way before they head off into the working world is a smart idea.  I’m really surprised there is not more emphasis on it in our high schools.

      The private sector is trying to apply these principles and I think it is catching on.  Check out some of your local credit unions.  

      Some have be setting up small educational branches in high schools and offering finance education and the importance of maintaining a decent credit score to our young folks.

      I think it’s a great idea and I’m hoping it catches on.

      Here is a link to a page that provides information about credit unions in schools.  If you have an extra minute or two, give it a read.  

      Thanks for you thoughtful comments.

  2. Hi Patrick, 

    What an interesting article. Although I do know my credit score I’ve never understood how it was calculated. 

    Its a pity that more people are not better educated on the importance of maintaining a good credit score – or how to improve their score if things have gone off the rails.

    I think the first step is finding out what your score is! If you don’t know there’s a problem you can’t work towards fixing it. 

    Thanks for an enlightening article. 


    • Hi Margaret,

      It’s good to hear that you know your credit score.  Although the trend is improving, many Americans do not.  

      Once you know your score, it pays to know how it’s calculated.  If you don’t know what impacts it, you can’t manage it.

      One of the most important factors in managing your credit is the utilization score.  Maxing out your available lines of credit can damage your credit score and make it difficult for you to get the best rates.

      Even worse, you may not be able to get credit at all.  Keep this number under 30% and you should be okay. 

      To calculate it, take the amount of credit outstanding and divide it by the amount of credit available and it will return the utilization ratio. So $15K of balance utilized divided by $50K available credit results in a 30% utilization ratio.



  3. It’s also a little known fact that you can get one free credit report from each of the 3 providers once a year.

    We take advantage of that and get a report every 4-5 months just so we can monitor it.

    I also agree that this should be taught in school. So many young people get credit card offers in the mail and don’t realize how it will affect them long term. Many just keep using the card without even knowing the interest rate.

    Thank you for a good article and raising awareness. It’s always good to know what your credit history and score are so you can plan for your future.

    Do you prefer one of the 3 monitoring companies over another?

    • Great comments Lisa.

      It’s an excellent idea to take advantage of the free credit reports offered once a year.

      You are absolutely correct!  Most folks don’t even know this free service is available. If you pull one every four months you can monitor your credit history three times a year.

      It’s good to know your credit history, but it’s just as important to monitor your credit score.  There are some free services out there like Credit Karma or Credit Sesame where you can get your credit report free.

      Some credit cards are offering your score for free.  So look around for credit card offers that provide this feature.

      I’d take a look at LifeLock.  I use it in tandem with my Norton antivirus.  Nothings fool proof, but the more protection you have the better.

  4. Thanks for this informative article Patrick. 

    I stumbled upon your article at the right time as we are about to apply for a home loan and you are right I have no idea what our credit score is, let alone how it is calculated. 

    Will be taking a closer look at this before we make our application. Thanks again!

    • My pleasure.

      Yea it’s great to know how your credit score is put together and understand the things that affect it.

      You should definitely know what is a decent credit score before you go house hunting. It can save you tons of money especially if you have a good one.  

      In addition get a loan pre-approval as well, this way you’ll have your financing ready to go when you find that dream home.

      Some good places to start and they are free is Credit Sesame or Credit Karma.  You get your score for free and some other neat credit features like identity theft protection.  They can even help you find a loan or credit card.

      Best of luck.

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