Breaking Down a Good Credit Score

So, your credit score is a 3-digit number that can have a big impact on your quality of life. Crazy that the world we live in (in the US) gives so much power to a 3 digit number. 

For better or worse, your credit score is important. Everyone wants to have a good one, but everyone doesn’t even know what a good one is. 

Don’t worry, we’re gonna let you in on the secret. 

Let’s Establish Some Basics

If having a credit score seems random, it's because it kind of is. It’s one of those things you need to understand that no one ever really breaks down—until now.

Your credit score is a 3-digit number determined by something called a credit bureau. There are three bureaus: Equifax, Experian and TransUnion. Although – Fico and Vantagescore are used as scoring models to interpret the reporting data from bureaus.

They use credit scoring models AKA math to try and guess how likely you are to pay people who lend you money back. For those of us who aren’t the biggest fans of numbers or data, this system may seem questionable, but it is what it is and we have to learn how to navigate it! 

Anyway, these credit bureaus get reports on you every month or so called a credit report and they use that to figure out if banks should loan you money. Your credit report has basic information about you in it like your name and birthday. It also keeps track of how timely you’ve paid back previous loans and how much of your available credit AKA borrowed money, you’re using (this is known as your credit utilization ratio). 

Credit reports also determine what the credit score range is. Credit scores can range from 300 to 850. 

You’re probably thinking, “That’s a wide range! What is considered a good credit score?” 

Don’t worry bestie, we got your back for this one. 

What is Considered a Good Credit Score?

A good credit score is important because it has an impact on how much you pay for the things you want like your car or house. When you have a good credit score, you get charged less interest which means you pay less for your purchases over time (especially if you’re not able to pay off your credit card balance every month).

A “good”: credit score is anywhere from 670-739. A very good credit score is anything from 740-799. And an excellent credit score ranges from 780-850. 

Your score is below 670? Then you probably have an average credit score. Those range from 669-580. 

It’s lower than that? You might have a bad credit score. Those range from 300-579. (Don’t worry though, EXTRA can help you with that.) 

What Affects Your Credit Score? 

If those numbers seem arbitrary it’s because credit scores didn’t even exist until the 1980s, but we can’t change that. We have to live with them now. All we can do is try to have a higher score. 

How do you get your score high? 

Have a Strong Payment History 

One of the main factors in determining your credit score is your payment history—how often you pay back your loans. So, you don’t want to skip or miss payments if you can avoid it. Doing so might ding your credit score and dings are no good. We only want raises around here. 

Have a Varied Credit History

You want to show the credit bureaus that you can handle different types of credit (this is officially called your credit mix). So, having a car loan and credit card isn’t a bad thing as long as you have a game plan for handling the payments. Managing different types of credit proves to lenders that you’re the responsible person we both know you are. 

Watch Your Credit Limit

You don’t want to be financing your whole life on your credit card. That’s a surefire way to get in debt and go over your credit limit. Both of which are very, very bad.

Try and use only 30% of the credit available to you. This will ensure your credit utilization ratio says low and get you one step closer to having a good credit score. 

How Do I Find Out What My Credit Score Is? 

You’ve got to check your credit report bestie! Now, don’t go crazy and check this everyday. It’s not going to change that often. It only changes every 30 days or so when the people you owe money snitch on you to the credit bureaus or for good behavior. 

You can use a tool like Credit Karma or whatever credit checking tool comes with your bank to check on your credit score. 

Knowledge is power and knowing your score, whether it’s good or bad is the first step to getting a good score. 

Why is Having a Good Credit Score Important?

Well, because those 3 little numbers have a big impact on how much you pay for things. When you have a good credit score, you get a lower interest rate from whoever loaned you the money which means you’re getting a better deal on your purchases. If you have a not-so-great credit score then you’re probably going to have a higher interest rate on your purchases and will end up paying more for them. 

Don’t believe me? Here’s an example of how having a good credit score saves you money.

Person 1 has a 760 credit score. Person 2 has a 640 credit score. 

They’re both on a 30-year mortgage of $350,000. 

Person 1 is able to get an interest rate of 4.1% while Person 2 gets an interest rate of 5.7%. 

Person 1 pays $1,700 per month whereas Person 2 pays $2,035 per month. 

Person 1 is paying $335 per month less than Person 2. This comes out to about $120,000 saved over the course of a 30-year mortgage. The moral of the story? Don’t be Person 2.

What Else Can I Do to Build My Credit? 

Keep Old Accounts Open 

Another important factor in your credit score is how long you’ve had credit. This is very much one of those, you have to have experience to get the job, but no one will hire you type of things. (EXTRA can help with that by the way.) 

If you keep your old accounts open and don’t use them then your credit history stays long. If you close accounts as soon as you pay them off, then you lose all that data and credit history from your credit report. 

It can be hard to keep accounts open and not use them though. If you’re going to do this, make sure you cut up your credit cards or freeze them in ice (that way the ice block has to thaw before you can use the card). 

You might even need to delete the banking or credit card companies app from your phone because these days you can get a digital card right in the app, and the purchases made with it have to be paid back all the same. 


We’re the first debit card that helps you build credit! Each purchase you make with your extra debit card will get reported to the credit bureaus, building your credit and payment history at the same time. We’ll give you a spending limit based on your bank balance, spot you the money, and then pay ourselves back the next day. At the end of the month, we tally up all those payments we spotted you for and let the credit bureaus know how responsible you are. BOOM! You’ve got a good credit score. 

Having a good credit score is great. But all hope isn’t lost if your score isn’t where you want it to be. Take the steps we’ve outlined here, sign up for EXTRA, and you’ll have a good score in no time. 

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