What is the difference between a credit rating and a credit score?

A credit score is a three-digit number from 300 to 850 that expresses an individual’s creditworthiness (or, less frequently, a business’s credit standing). A credit rating can describe either a range of credit scores or a letter grade that reflects a business’s or government’s creditworthiness (ranging from D to AAA).

Let's say your credit score is 700. That exact credit score can give lenders a very precise indication of how you manage your credit. On the other hand, your credit rating of "good" only conveys a general sense of your creditworthiness because the "good" range encompasses all scores between 700 and 749.

If your credit score is close to the threshold for a higher credit rating, your exact score becomes even more important in portraying your creditworthiness. For example, if your credit score is 630, your credit rating would be considered “poor.” Despite this designation, your credit score is just 10 points shy of the “fair” credit range, which opens up so many more possibilities for credit at better rates. In that case, a lender looking at your credit application would be much more likely to approve you on the basis of your credit score, rather than your credit rating.

For your convenience, we’ve listed a breakdown of the credit ratings and their respective credit score ranges below.

Credit Score Ratings and Ranges

Perfect Credit: 800-850

Excellent Credit: 750-799

Good Credit: 700-749

Fair Credit: 640-699

Poor Credit: 571-639

Very Poor Credit: 500-570

Bad Credit: 400-499

Very Bad Credit: 300-399

No Credit/Limited History: Less than 3 years of credit

If you’re interested in improving your credit score and rating, WalletHub’s free Credit Analysis tool can give you custom advice, along with daily credit-score updates so you can track your progress.