YOU MIGHT BE SURPRISED to hear this, but as of October 2020, the average FICO score was 711. The FICO score has continued to increase since reaching 700 for the first time in April 2017.

But that's not the only surprise. Would you believe that 22.3% of consumers actually have a credit score of more than 800? FICO scores typically range from 300 to 850. A score of 800 or more is considered an exceptional FICO score.

Don't worry if your score isn't more than 800, though. The bar for "excellence" begins before 800, but the number to beat varies depending on which credit score is used.

The two most common scores used are FICO Score 8 and VantageScore 3.0, so let's take a look at each one. And don't worry if you don't make the cut for excellence. After I explain the two scores, I'll give you tips for dramatically improving your score in a short amount of time.

FICO Score 8: What's a Great Credit Score?

If there were only one FICO score, this would be so easy to explain. But this is credit, so it has to be a little mysterious.

As I already mentioned, your generic FICO score has a range of 300 to 850. But there are also industry-specific scores that lenders use to assess risk in particular situations. For example, in auto lending, the lender might want to see the applicant's FICO Auto Score 8, but there are five more score versions for auto lending, too.

For credit cards, issuers sometimes request FICO Bankcard Scores, and this version ranges from 250 to 900. As you can see, it's impossible to pick one number that rules them all.

But I'm focusing on FICO Score 8 because it's the most widely used version by all three credit bureaus. If you have a high score with this version, you most likely have a high score with the FICO Bankcard Score.

Here's how the credit ranges shake out, according to myFICO.com:

• Exceptional: 800+
• Very good: 740 to 799
• Good: 670 to 739
• Fair: 580 to 669
• Poor: 579 and lower

Looking at the breakdown, you might think you need a score of at least 800. To be classified as "exceptional," you do. But you don't need an 800 FICO score to get the best interest rates for loans and credit cards.

If you have at least a 760 score, according to Informa Research, you're in great shape. You can get a 30-year fixed mortgage at a low 2.857% interest rate. With an 820 score, you get the same rate. Maybe you're not technically exceptional in the eyes of FICO, but who cares? If you can get the best rates, that's all that matters.

FICO is transparent about the variables that make up your score. Here are the five factors considered in your FICO score:

• Payment history: 35%
• Credit utilization: 30%
• Length of credit history: 15%
• Credit mix: 10%
• New credit: 10%

As you can see, there's a heavy emphasis on payment history and credit utilization. Most credit score versions also include these two factors in their scores, but they're weighted differently.

VantageScore 3.0: What's a Great Credit Score?

Although most lenders use FICO scores, VantageScores have gained a little ground. Recent versions, such as VantageScore 3.0, use the same range as FICO scores: 300 to 850.

VantageScore doesn't give percentages for the factors involved in score calculations. Instead, it focuses on how "influential" a category might be.

Here's how it works:

• Credit usage, balance and available credit: extremely influential
• Credit mix and experience: highly influential
• Payment history: moderately influential
• New accounts: less influential
• Credit history age: less influential

According to Experian, one of the three major credit bureaus, a VantageScore between 750 and 850 is excellent, and a good score is between 700 and 749.

But note that since the factors aren't weighed exactly the same, a VantageScore of 750 isn't the same as a FICO score of 750. So when it comes to VantageScore, just make sure your score is trending upward and in the excellent range (750-850). But if you do have access to a FICO score, use that score to determine if you qualify for the top rates.

Why an Excellent Credit Score Matters

An excellent credit score helps you save money. Remember the above example that showed that a 760 FICO score gets you the top rate of 2.857% on a 30-year fixed $300,000 mortgage? That results in a $1,242 monthly payment on principal and interest.

Let's see what your monthly payment would be if your FICO score was only 630. Now, your interest rate is 4.446%, and your monthly payment on a 30-year fixed $300,000 mortgage is $1,510. The payment difference after one year? You pay $3,216 more during the first year of your loan. After 10 years, you've paid an additional $32,160. The difference between a below average score and a great score is astounding.

Aside from getting lower-cost loans, you'll also qualify for the top credit cards and for lower insurance premiums. And in the midst of an emergency, such as COVID-19, having a great credit score is valuable because it can help you get easier access to a less-expensive loan.

Improving Your Credit Score

It takes six months of reported account data to generate a FICO score. With VantageScore, if you have at least one month's worth of credit activity within the last 24 months, you can generate a score.

You don't get to choose which score is used by a lender, but you do have the power to develop credit habits that will raise your score, regardless of the type or version that's used. Pay attention to the following habits to boost your credit score.

Maintain a stellar payment history.

Set up a realistic budget and pay all of your bills on time. I'm talking about every single bill, not just your credit card bill. A great payment history is the pathway to great credit.

Watch your credit utilization ratio.

You have a credit utilization ratio, which is the amount of credit you've used compared with the amount of credit you have available. Keep your credit card balances under 30% – actually, 10%, if you can – and you'll see an improvement in your score.

Stay out of debt.

Start tracking your spending so you are always aware of your credit card balance. Once you are using several credit cards, having a system in place is essential. If you don't know where every dollar is going, you will probably end up in debt.

Stop obsessing about your score.

Just practice the habits listed here, and your score will improve. But do chill out about the exact number. Your credit score will change as new information is reported to the credit bureaus. So be patient and responsible credit use will fix your score.

And remember, you don't need a perfect credit score. Get your score into the excellent credit category, and you'll get the best deals on interest rates.

This article was originally published By Beverly Harzog, creditcards.usnews.com.