Jun 12, 2025

Person sitting at desk checking their credit score on a laptop.

A good credit score may help you get lower interest rates on loans, higher credit limits, reduced insurance costs, and even smaller security deposits for utilities and housing.

Those are only a few of the potential perks of good credit. In general, a strong credit score can open doors to a lifetime of financial opportunities that may place you on the road to financial well-being.

To explain the benefits of a good credit score, we’ve broken down the impact into 10 key areas. Check out this list to see how good credit can help set you up for a brighter financial future.

Table of contents

What is a good credit score?

Your credit score is a three-digit number that gives lenders an idea of your creditworthiness, or how likely you are to pay your bills on time. Credit scores are based on your credit history as shown in your credit reports. Generally speaking, lenders see a borrower with a higher credit score as being less risky when it comes to paying back a loan.

FICO® Scores* are the most widely used scores and are divided into five ranges. The higher the number, the more creditworthy you are in the eyes of lenders. The five FICO® credit score categories, from “exceptional” to “poor,” are listed here:

  • Exceptional—800–850: An “exceptional” credit score is the highest rating and may qualify you for the best credit products with the lowest interest rates.
  • Very Good—740–799: Borrowers with scores in this range are considered very dependable borrowers. Their credit reports show that they handle debt well and are rarely late with payments.
  • Good—670–739: Credit scores in this category indicate that the person is a reliable borrower but might not have a long credit history or may have minor issues in their payment history. The average credit score of Americans is 717 and falls into this category. 
  • Fair—580–669: A “fair” credit score may indicate to lenders that a consumer has high levels of debt or might have had difficulty in the past making payments on time.
  • Poor—300–579: A credit score in this range may make it difficult for someone to borrow money. If a loan is approved, it might be expensive and carry a high interest rate.

What are the advantages of a good credit score?

A higher credit score may indicate to lenders that offering you credit carries a lower risk. By increasing your score, you may have more opportunities to build financial momentum and fully achieve your financial goals. We’ve listed 10 top ways a good credit score might help.

1. Easier credit approvals

If you have a good credit score, banks and other lenders may be more likely to approve applications for credit cards, mortgages, and other loans. A higher creditworthiness may allow you to access the financial resources you need without delays or extra steps.

2. Higher credit limits

Because a good credit score can signal to lenders that you’re a reliable borrower, it may help you get larger credit limits on credit cards and loans from banks. With higher credit limits, you might enjoy benefits such as stronger purchasing power and more financial flexibility.

3. Lower interest rates

With a good credit score, you might be eligible for lower interest rates for credit cards and many types of loans, including personal loans, auto loans, and mortgages. Lower interest rates may add up to big financial savings over the long term.

4. More choices when applying for a loan

Having a good credit score might give you more options when comparing loan terms, rental agreements, discounts, and other perks. For example, if you pre-qualify with multiple mortgage lenders, they may lower your interest rate or waive loan fees to win your business.

5. Better car insurance rates

A good credit score may help you save money on car insurance, homeowners insurance, and other types of insurance. Insurers may consider your credit history and credit score when determining your premium.  

6. Lower security deposits for utilities

If you have a good credit score, some utility companies, such as internet providers and cable companies, might not require a security deposit before starting service. Without a strong credit score, you may need to get a letter of guarantee showing that someone will pay your bill if you’re not able to.    

7. Cell phone accounts without prepaying

Telecom companies may consider your credit score when you open a new account. A higher credit score might help you get financing from the company and receive other favorable terms.  

8. More credit card rewards

Borrowers with high credit scores often have access to better credit card rewards, such as invitations to exclusive events and generous mileage, hotel, and other points. These plans may be marketed primarily to candidates with stronger credit histories.

9. Improved offers for mortgages and leases

A good credit score may open the door to more housing options by helping you get approved for a low-interest mortgage or making it more likely for landlords to approve your lease application. A good score may also mean that you don’t need a cosigner for your lease or to pay a large security deposit up front.

10. Better position for your financial future

In general, a good credit score may position you for a wide range of attractive financial options and help lead you on a path to financial stability. Becoming financially stable might also help you manage unexpected expenses and stay focused on your financial future.

How can you find your credit score?

To review the factors that make up your credit score, you can obtain your credit reports for free at AnnualCreditReport.com.

You may be able to check your credit score elsewhere too. Many lenders offer customers free access. If you are a Discover® card or personal loans customer, for example, you can get up to 12 months of recent FICO® Credit Scores, plus see important details that help make up your score for free.*

We can help you learn about reading your credit report and how regularly checking your credit report could help you plot a path towards your financial goals.

How to Read a Credit Report

Articles may contain information from third parties. The inclusion of such information does not imply an affiliation with the bank or bank sponsorship, endorsement, or verification regarding the third party or information.

* FICO® Disclosure:

FICO® Credit Score Terms: Your FICO® Credit Score, key factors and other credit information are based on data from TransUnion® and may be different from other credit scores and other credit information provided by different bureaus. This information is intended for and only provided to Primary account holders who have an available score. See Discover.com/FICO about the availability of your score. Your score, key factors and other credit information are available on Discover.com and cardmembers are also provided a score on statements. Customers will see up to a year of recent scores online. Discover and other lenders may use different inputs, such as FICO® Credit Scores, other credit scores and more information in credit decisions. This benefit may change or end in the future. FICO is a registered trademark of Fair Isaac Corporation in the United States and other countries.

1 https://www.fico.com/blogs/average-u-s-ficor-score-stays-717-even-consumers-are-faced-economic-uncertainty