Is a 700+ credit score good?

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Updated on Wednesday, April 7, 2021


Once your credit score passes the 700 mark, you’ve hit a milestone, but how do you get there?

A credit score over 700 falls into the “good” range, and can open a lot of doors in terms of qualifying for some of the best interest rates for credit cards and loans.

Credit scores help lenders assess your “risk factor” and the higher your score, the more reliable you appear.. The lower your credit score, the more likely lenders think you may default on a loan, make late payments or overextend yourself with borrowed funds..

People with 700+ scores are considered to be “prime” customers who are diligent about paying on time, use far less than 30% of their available credit than what’s extended to them and have at least three to five years of credit history. They also tend to have a good mix of credit and installment loans and don’t apply for new lines of credit on a regular basis.

Understanding the financial behaviors that can bump your credit score over the 700 mark can help you become a member of the “prime” club,

What factors influence a credit score?

There are two primary consumer credit scores, the FICO Score and VantageScore. While both carry a range from 300-850, the FICO Score is used in more than 80% of lending decisions. FICO assigns a weight to these five different factors that are then fed into an algorithm that comprises your credit score:

  • Payment history (35%): This is the single most important factor impacting your credit score. Missed payments can crush your credit score quickly and remain on your credit report for 7 years, although their impact will lessen over time as you make timely payments on all your accounts. Not all late payments are created equally. If you are fewer than 30 days late, your missed payment will likely not be reported to the bureaus (although you may be subject to late fees and a penalty APR). Once you are more than 30 days late, you will be reported to the credit bureaus. The longer you go without paying, the bigger the impact on your score. A single missed payment of 30 days or more can still have a big impact on your score, shaving off anywhere from 60 to 110 points.
  • Amounts owed (30%): The higher your credit card balance is relative to your card’s credit limit negatively impacts your credit score. This is called your credit utilization ratio. High balances can signal that you’re having a hard time keeping on top of your debt load, and the one of the quickest ways to boost your credit score is to lower your balances to less than 30% of your credit limit. For example, if you have a credit card with a $1,000 credit limit, do your best to keep your balance below $300 or, even better, to $0. It’s also important to know that loans do not factor into your credit utilization, just lines of credit such as credit cards.
  • Length of credit history (15%): The longer you’ve been using credit, the better for your credit score. However, this scoring factor is one you have the least control over as it takes time to build up a long credit history. One way to protect your length of credit history is to keep a credit card you’ve had the longest open and active by using it for a small recurring charge every month. FICO looks at the average age of all your accounts, so closing an old account can shorten that average age of accounts.
  • New credit (10%): This looks at how many new accounts you have opened, and how many times you have applied for credit. Each time you apply for a loan or credit card, a lender will conduct a review of your credit reports and scores, known as a hard inquiry. Each hard inquiry can knock your score down a few points for around a year. In general, lenders frown upon opening too many lines of credit in a short period of time as that can illustrate that you’re in financial trouble. To protect against having too many hard inquiries, apply for new credit sparingly.
  • Credit mix (10%): The more types of credit you have, the better. Someone who has successfully managed a car loan, a mortgage and a credit card would score better than someone who has just managed a credit card successfully.

What’s a good score?

The higher your score, the lower the interest rates you can get from banks and lenders. FICO defines a “good” credit score between 661-780, according to credit bureau Experian.

Why you want a score above 700

A credit score above 700 essentially puts you in the “prime” category and opens up opportunities that aren’t available to consumers with lower scores, including:

  • When you buy a home, you should get competitive mortgage interest rates
  • When you buy a car, you may qualify for any 0% financing deals from manufacturers
  • When you apply for a credit card, you may qualify for the best bonus and introductory offers
  • When you apply for auto insurance, you will be considered more responsible – and could get better rates
  • When you apply for a job that requires a credit check, you could easily pass screening

Behaviors that can keep a credit score from rising above 700

There are some common reasons that can keep your credit scores from rising above the 700 mark:

  1. If you’ve never had a credit card or loan, then you typically don’t have enough credit history reporting to the big three credit bureaus (Equifax, Experian and TransUnion) to have established a credit score.
  2. If you’ve been maxing out your credit cards or carrying balances of more than 30% of your credit limits.
  3. You have a history of making late payments or missing payments entirely
  4. Or, you’ve applied for multiple new credit cards or loans in a short period of time.

Check out 6 simple steps for improving your credit score.

How to boost a low credit score

If you’ve struggled with your financial situation, know that by taking simple, actionable steps, such as paying down high balances and paying on time every time, you can begin rebuilding your score and eventually become a “prime” customer.

If you’re new to credit, then begin building your credit score with a student credit card, a store card or a secured card, which all have lower credit score requirements for approval.

Secured cards require you to submit a security deposit of around $200, which then serves as your credit line. Before you apply, make sure the card issuer reports the account and payment activity to all three credit bureaus as each bureau generates its own FICO Score. Use the card responsibly by making small charges to it each month and pay off the entire balance by the statement due date.

Track your credit score progress monthly and once it crests the 700-mark, you should be able to qualify for a better card with a higher credit limit, such as a cashback card or travel rewards card.

To ensure your credit score keeps going in the right direction, always pay at least the minimum payment due on time, and keep your balances well below the credit limit.

Finally, know that your credit score will fluctuate every month by a few points here and there as you borrow and repay, open new lines of credit or pay off loans, but those variations are normal and shouldn’t be a cause for concern as long as your scores are generally trending up instead of down.