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700 Credit Score: Is It Good or Bad? | Credit Cards

A credit score of 700 places you in the middle of what is considered a good range for FICO scores. Latest Reports Average FICO . score In the US it’s 716, so you’re doing pretty well by comparison.

With a 700 FICO score, you are likely to get good interest rates on credit cards and loans. You will also be eligible for a mortgage, but not at the lowest rates.

But if you want the lowest prices, you will need to raise your FICO score to 760, which is very good credit.

FICO score ranges

A lender will likely use the VantageScore model when applying for credit, but since FICO is used by 90% of lenders, let’s focus on this score. If you get a better FICO score, you are more likely to improve your VantageScore because the factors considered are very similar.

Here is how the FICO score ranges are:

  • Exceptional: 800-850.
  • Very good: 740-799.
  • Good: 670-739.
  • Adel: 580-669.
  • Weak: 300-579.

Although a 700 FICO score is perfectly acceptable, your goal is to move on to the next range, which is the very good range, for a 760 credit score.

This may sound daunting, but the easiest and fastest way to improve your score is to educate yourself about each of the five factors that make up your score.

How is your FICO score calculated

There are five factors that make up your FICO score. Here is each factor and weight given by the FICO algorithm.

This factor has more weight. If you pledge to pay all your bills on time, you are on your way to a very good result.

Even a single payment more than 30 days late can lead to a significant drop in your score. The higher your score, the lower it is.

If cash flow is an issue, ask your credit card issuer to change your due date so it more closely aligns with your salary. Also, make sure you have a budget and track spending so you don’t overspend.

But if the problem is that you don’t have enough money to pay the bills, reach out to your creditors and ask for help.

Your credit utilization ratio is the amount of credit you have used compared to the amount of credit you have available. You must have a percentage of less than 30%. If you are trying to increase your score quickly, keep it at 10% or less.

Here’s an example: You have a credit card with a limit of $2000. Let’s say your balance is $600. This means that you have a credit utilization ratio of 30% (600/2000 = 30%). This is considered acceptable.

However, if you are aiming for the 10%, your balance must not exceed $200 (200/2000 = 10%). And you want to make sure the overall usage across all credit cards is less than 10%.

While the length of time you’ve had credit makes a difference to your FICO score, that doesn’t mean you need decades of credit before you can get a great score.

This part of the score takes into account how long your accounts have been open, including the average age of your accounts. You can’t change how long you’ve had credit, but as long as you use your accounts regularly and practice good credit habits, you’ll be fine.

Each time you apply for a credit card, it’s a tricky inquiry, which can result in the loss of two to five points from your FICO score. This is for every query.

The good news is that FICO’s results only take into account the past 12 months of new credit inquiries. So spread your credit card apps. And if you plan to buy a mortgage anytime soon, don’t apply for new credit at least six months before doing so.

Your credit combination is only 10% of your score, but every little bit helps. A good mix of credit may include both revolving credit and installment loans. For example, you might have a mortgage, credit cards, and possibly a student loan on your credit report.

This does not mean that you have to go out and buy a car to have an installment loan on your credit report. Over the course of your life, as your needs change, you will find that your report naturally begins to show a mix of credit.

How to improve your 700 credit score

Now that you understand what goes into your FICO score, you can use this knowledge to your advantage. Practice these great credit habits, and you will be able to build a high credit score and keep it there.

  • Pay all your bills on time. This is critical. Make all payments on time, not just credit cards. Set up emails, text reminders, automatic payments, or whatever it takes to avoid missing a payment.
  • Keep low credit card balances. Remember that your credit utilization ratio has a huge impact on your credit score. It’s 30% of your score, so keeping balances low can really help increase your score.
  • Debt repayment. Now you know the relationship between your score and your usage percentage. Debt increases your percentage. As you pay off the debt, your score will improve. But only if you stop using credit cards so it doesn’t add to your debt. Stay away from the cards and focus on getting rid of debt.
  • Review your credit report regularly. Errors in credit reports sometimes occur. So just review your report, and make sure you don’t see any mistakes that could lower your score. If you have negative items, check the details for accuracy, including the dates.
  • Don’t skimp on your score. All you have to do is make sure you practice the good habits in this section. It’s fun to watch the progress, and there are many free apps to check your score. But improvement takes time and patience. Just follow the suggestions above, and your score will rise steadily.

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