Is A Credit Score Of 700 Good Or Bad
VantageScore® is another commonly used credit score, which, like FICO®, runs on a scale from 300 to 850. Generally, good credit scores range from 700 to 749. If you have a score between 750 and 850, then you fall in the great range.
With a credit score of 700, youre likely to be approved with favorable loan terms. If you have a credit score of 700 or higher, you should feel confident applying for financing.
What To Avoid If You’re Working On Your Credit Score
When you’re actively working on your credit rating, make sure you don’t fall into some of the common booby traps that would have contributed to your poor score in the first place.
Here are a few things to avoid when you’re trying to boost your credit score.
If you feel you need a little more help to get on top of your score, consider speaking with a professional financial counsellor. Some financial advice could help you get back on the right track financially and your credit score could be improved as a result.
And if you don’t yet have your credit score, you can receive it through the free Finder app and you can keep up to date with your score as it changes. By seeing this monthly, you’ll stay committed to a new financial you.
Understanding Your Credit Score
Your credit score is a number that reflects the information in your credit report. Lenders use this number to assess your creditworthiness in other words, how likely you are to repay a loan on time. The higher your score, the more attractive you are to lenders and the better your chances of being approved for loans and credit cards with favorable terms.
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Correct Errors On Your Credit Report
Correcting errors on your credit report is a relatively quick way to improve your credit score. If its a simple identity errorlike a credit card thats not yours showing upyou can get that corrected within one to two months. If its an error on one of your accounts, though, it could take longer, because you need to involve your creditor as well as the credit bureau.
The entire process typically takes 30 to 90 days. If theres a lot of back-and-forth between you, the credit bureau, and your creditor, it could take longer.
The first step to correcting errors is to get a copy of your free credit reports from TransUnion, Equifax, and Experian . You can do this at no cost once a year at annualcreditreport.com.
Next, review your credit report for errors. If its an error on one of your accounts, you must refute that error with the bureau by providing documentation arguing otherwise. For example, if you paid a credit card on time and the card issuer is reporting a late payment, find a bank statement showing that you paid on time.
How To Check Your Credit Report
You can get a free copy of your report at annualcreditreport.com.
Under normal circumstances, you would be able to get one free report from each of the three major credit reporting bureaus per year. However, in response to COVID-19 you can access a free weekly report from any of the bureaus through December 31, 2022.
Check your which could be dragging your score down. If you find mistakes, you can get items removed from your credit report by disputing the information directly with the credit bureau. They are obligated to investigate any dispute and resolve it within a reasonable amount of time. Keep in mind, however, that only incorrect information can be removed from your report.
According to Richardson, each credit report will have the information you need to improve your score. There are four or five bulleted statements about your credit profile that can help you make a road map of what to do if youre really in a position where you need to improve your score, he says.
You may also find a numerical or text code in your report, but no additional information as to what it represents. These are factor codes and represent items that may be dragging your score down. VantageScore has a free website, ReasonCode.org where you can enter the code from any credit report and get an explanation of what it stands for and advice on how to resolve the issue.
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How Often Should You Check Your Credit Score
You should check your credit score regularly to check for errors, but make sure that you do so through soft inquiries so that your score isnt dinged. Many banks offer free credit monitoring to their customers check with yours to see if you can enroll in their service and get alerts whenever your score changes.
Become An Authorized User On Someone Elses Account
If youre new to credit and cant qualify for your own credit card, becoming an on someone elses account can be a great way to get started. But its a double-edged sword: If the person who owns the account has healthy credit, it can help you establish a positive credit history over the long run. On the other hand, if they miss payments or carry high credit card balances, that could also reflect poorly on you. Thats why its important to pick someone you trust who has a longer credit history and higher credit scores than you do, and who overall has a positive credit history.
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Get A Secured Credit Card
A secured credit card is designed to help borrowers build their credit.
When you sign up for a secured card, the provider will require a cash deposit to serve as collateral and act as the credit limit. For example, if you put down $200, youll have a $200 credit limit. If you dont pay your credit card bill, the card company can take the deposit.
You can use a secured card at the same in-store and online retailers where you would use a traditional credit card. However, your credit limit will typically be lower.
With a smaller limit, you should only use a secured card for small purchases well below your credit limit. This is because your credit utilization ratio, which represents how much of your total available credit you use in a given time, is the second most important credit factor. For example, if your current balance is $100 and your credit limit is $200, then your utilization ratio is 50% .
As a rule of thumb, its best to keep your credit utilization ratio below 30%. However, a ratio below 10% will result in an even better score. So if you open a secured credit card, multiply your total limit by 30% and never go above that at a given time. For example, if your limit is $200, dont use more than $60 at a time .
What Can You Do With An Improved Credit Score
Some of the perks that come with a good credit score include:
- Getting a low rate on a peer-to-peer loan. A good credit score can help you to get a better rate on a peer-to-peer loan.
- Getting a home loan. A good credit score can help you to get a home loan and is arguably the primary reason credit scores are important.
- Future potential to access credit. Whether or not you need credit now, a good credit score will likely be important down the line. For example, you might have credit on a couple of credit cards for travel, but keeping a high score will be important when you need to take out a home loan.
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How Soon Will Your Credit Score Improve
Unfortunately, theres no way to predict how soon your credit score will go up or by how much. We do know that it will take at least the amount of time it takes the business to update your credit report. Some businesses send credit report updates daily, others monthly. It can take up to several weeks for a change to appear on your credit report.
Once your credit report is updated with positive information, theres no guarantee your credit score will go up right away or that it will increase enough to make a difference with an application. Your credit score could remain the sameor you could even see your depending on the significance of the change and the other information on your credit report.
The only thing you can do is watch your credit score to see how it changes and continue making the right credit moves. If you’re concerned about inaccurate reporting on your credit score or simply want to keep a closer eye on it you could use a .
Pay Down Revolving Account Balances
Even if you’re not behind on your bills, having a high balance on revolving credit accounts can lead to a high and hurt your scores. Revolving accounts include credit cards and lines of credit, and maintaining a low balance on them relative to their credit limits can help you improve your scores. Those with the highest credit scores tend to keep their credit utilization ratio in the low single digits.
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What My Improved Credit Score Allowed Me To Do
In August of 2011, I had to purchase a car so I could switch jobs.
When I filled out the credit application to see if I qualified for lower financing rates, my credit score came back as 731.
In other words, I raised my credit score from 621 to 731 in just five months!
This is a very big deal because, at 621, I would have been denied a loan for the car, or would have had an interest rate that exceeded 9% on the auto loan.
Since I chose to get a secured credit card, I was able to take the car loan on my own and qualify for the low rate of 3.99% financing.
The difference in the loan between the two interest rates would be $750 over the life of the loan, far surpassing the cards annual fee, and the opportunity cost of my secured credit card holding my $1,100 for five months.
How To Increase Your Credit Score
Now that you know a little bit more about credit scores, you might be motivated to increase yours. Luckily, there are many ways that you can work to improve your score. Dont be discouraged if youre unable to increase your credit score overnight. It will take some time, but it will happen with intentional steps.
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Check And Understand Your Credit Score
Its important to know that not all credit scores are the same, and that they fluctuate from month to month, depending on which credit bureaus lenders use and how often lenders report account activity. So, while you shouldnt worry if you see your scores rise or fall by a few points, you should take note when a big change occurs.
The two main consumer credit scoring models are the FICO Score and VantageScore. Here are the factors that comprise your FICO Score and how much each factor is weighed:
- Payment history
- Amounts owed
- Length of credit history
- New credit
Here are the factors influencing your VantageScore:
- Total credit usage, balance and available credit
- Payment history
- Age of credit history
- New accounts
There are a variety of options for checking your credit score for free.
For example, Discover cardholders can get a free FICO Score from the Discover Credit Scorecard, or anyone can get a free VantageScore by creating a LendingTree account. American Express and Capital One also offer free VantageScores to both card account holders and the general public, though many other card issuers offer free access only to their cardholders.
Here are the tiers that credit scores can fall into, according to FICO:
|FICO Score tiers|
How To Improve Your Credit Score Quickly
The major contributing factor to improving my credit score in just 30 days was decreasing my ratio. I lowered my credit utilization ratio by 19%!
This took two steps.
First, I paid more than the minimum amount due on my credit cards. I do that anyway, but I bumped up the amount by about $25.
Second, I increased my available credit on one of my credit cards by accepting a credit line increase offer on my account. I would definitely suggest that you accept any credit line increase offer. Just be smart enough not to use it!
Its suggested that you request a credit line increase once every 6-12 months. Why? It helps with your credit utilization ratio, and that helps your credit score.
Your credit utilization ratio is the amount of debt you have divided by the total amount of credit youve been extended. Sign in to your credit card account online to see if a credit limit request is waiting for you, or call the number on the back of your card to find out about your options. The suggested utilization ratio is 30% or less on each individual account and all accounts combined.
Another major contributing factor is my perfect track record of on-time payments. According to Credit Karma, I have a 100% record of consistent, on-time payments. I never miss a payment by maintaining my own personal bills calendar, which tells me when all of my bills are due. I even set reminders one week early to allow room for any mistakes.
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How To Increase Credit Score
Your perfectly optimized content goes here! Many people ask how can I improve my credit now looking for tips that will help them put 100 points on their credit score in a month. Now, depending on your credit score situation, you may be able to do this. However, if youve got a 680+ credit score, its highly unlikely that youre going to be able to add so many points in such a short amount of time.
Instead, think about how you can improve your credit in the long term to get closer to that coveted 850 credit score. Here are some tips to help you improve your credit.
Why To Manage Credit Score And Credit Reports
Do you think a good Credit Score is essential only for obtaining a banking product? Not surprisingly, it is equally important for less perceptible requirements such as getting an employment offer and even renting a vehicle. Many people are aware of the concept of credit rating system. A credit score is basically a three-digit number that assesses how likely you shall be to repay a mortgage. It utilises data from credit reports to comprehend the risk of bad debts. A credit report is a detailed description of your credit history. There are few more companies in Indian which do the same task- CIBIL TransUnion, Equifax, Experian and High Mark.
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What I Learned From Being Denied Credit Cards
When I was finally prepared to get a credit card on my own, none of the banks I applied to would give me a chance.
It went like this:
|I am unemployed, have no credit history, and have a couple of thousand dollars in college debt that I will have to start paying on in the next year or two.|
Not exactly a winning pitch to convince someone to give you a line of credit! Two banks denied me, but one banker was kind and shared some info that has helped me raise my credit score over 100 points in the past five months.
First, I should stop trying to apply for credit cards that would get denied. His reasoning was simple: when you apply, they do a hard credit check which, in turn, can lower your credit score even more.
His second piece of advice was to get a secured credit card.
Avoid Using Buy Now Pay Later
Buy-now-pay-later is a new-style way to purchase items and pay for them in instalments or at a later date, interest-free. Later this year, buy now pay later will be logged on credit files, which could see millions of people having their credit score negatively impacted should they take on debt they cant afford to repay.
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How Long Do Derogatory Marks Stay On Your Credit Report
Your score is determined by the three credit bureaus , but its up to your lenders to contact them to report information about you. It can be as simple as your credit card company reporting that you made a monthly payment on time, increased your debt or decreased your balances. These are all positive influences on your score, but there may be a slight lag in timing due to the reporting process.
In addition to a potential delay in the telephone game between your credit issuer and the credit bureaus, certain financial events can linger on your credit history for years. Unfortunately, the more harmful events are often the ones that stick around the longest, so its best to know what actions will be the biggest burdens:
|Chapter 7 bankruptcy||10 years|
This may seem ominous, but heres the good news: recency bias is alive and well in the credit scoring world. Even if theyre still present, the old items that appear on your report have less weight than your newer ones.