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The main difference between a good and bad credit score

Your credit score isn’t just some magical number that changes every now and then without just cause. It’s a number that shows how financially responsible you are before anyone trusts you with credit and repayment.

In this post, we’ll show you what a good credit score and bad credit score means for you as a consumer.

Credit ranges

Your three-digit number will determine how creditworthy you are to lenders.

A credit score below 620 marks you with “bad” credit. Bad credit is the result of missed payments, bankruptcy or limited to non-existent credit history. Bad credit scores can be rebuilt with financial planning, but you’ll likely have to suffer some financial consequences until it rebounds.

If you have bad credit, any new loans or credit cards you receive will have substantially higher interest rates, because your lowered score makes you seem unable to handle payments.

“Good” credit scores appear above 680 to around 740. Once you're in this credit bracket, you’ll start getting offered better interest rates on credit cards and loans.

Once you get higher than 740, you’re considered an “excellent” credit holder. This category is usually successful when applying for premium credit cards and rewards programs. Further, you’ll get some of the lowest interest rates on student loans, car loans and mortgages.

Credit will cost you

The main difference between bad and good credit scores is the amount of interest you'll have to repay on a variety of loans. Having a score in the higher 700-range usually mean you get better rates on car, student and mortgage loans.

A $20,000 car loan could end up costing someone with bad credit over $30,000 by the end of the term, just based on the higher interest rate.

Someone with excellent credit, getting the same loan for the same car, might get away with a 0% interest rate just based on their trustworthy score.

Credit cards can be denied to people with bad credit scores, yet promoted and upgraded to someone with a better number.


At the end of the day, your credit score will usually reflect how good you are at handling important debts and their repayment. Missed credit card bills, phone bills or loan payments can all be tied to your credit score and act as a warning sign to new creditors looking into your financial history.

Bad credit scores can also result from criminal activity, identity theft, and wrongful inquiries; make sure to review your credit report as often as you can.

Good scores can quickly sour if you make repayment mistakes, but likewise, credit isn’t too difficult to rebuild once you start getting more organized with your money and repayment schedules.