Credit Score Is It Good Or Bad How To Improve Your 704 Fico Score
Before you can do anything to increase your 704 credit score, you need to identify what part of it needs to be improved, plain and simple. And in order to identify what needs to be improved, you should probably be aware of all the things that count and dont count towards your score.
Is 666 A Good Credit Score
The average FICO Score is 704, which is somewhat higher than your 666, indicating that you have a lot of room to improve. In fact, approximately 70% of consumers in the United States have scores higher than 666.
Furthermore, your 666 credit score is nearly within the Good credit score range of 670-739. With little effort, you may be able to improve that score range, allowing for access to a wider choice of credit and loans at lower interest rates.
Examining the report that comes with your credit score might help you figure out what happened to reduce your score. You may create the basis for a better credit score if you address the behaviors that lead to those occurrences and work gradually to improve your credit.
What Is The Minimum Credit Score Needed To Buy A House
- You need a minimum credit score of 620 for a conventional loan.
- There is a minimum score requirement of 580 for a government-backed FHA loan.
- VA loans are for veterans and active-duty military members. The minimum credit score requirement depends on the lender. Rocket Mortgage® requires a minimum score of 620.
- USDA loans for homes in eligible rural areas require a minimum score of 640.
Whether youre thinking about buying a home, taking out a personal loan, opening a new line of credit or shopping around for insurance rates, your credit score will play a big role in whether you qualify. If youre nervous about your score, heres the good news: credit scores can change. With some work, you can improve yours and reap the rewards of your success.
Whether youre interested in buying a home now or possibly in the future, youll want to pay attention to your credit score since it plays a role in qualifying you for a mortgage and helps determine the interest rate youll pay. View our other free resources on home buying and
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How Long Does It Take To Get A 704 Credit Score
It depends where you started out.
If you had fair credit starting out, this score may be easy to reach, once you remove any bad marks on your credit. Three collection accounts, for example, could drop a 800 credit score well below 600.
If you started out with weak credit , a single negative mark could lower you well below the 500s.
Mortgage Rates For Good Credit
Your credit scores are just one factor to consider when youre looking to get a great mortgage rate. Having good credit can help you get a better rate, but so can factors such as
- The type of mortgage loan youre looking for
- The total cost of your home
- Your debt-to-income ratio
- The size of your down payment
The average credit score it takes to buy a house can also vary greatly by location.
Once you have a general picture of your overall credit as well as how much house you can afford and the type of loan you want its a good idea to shop around. This can give you a better idea of what different lenders could offer you.
Compare your current mortgage rates on Credit Karma to learn more.
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+ Credit Scores By Income
700+ Credit Scores by Income
People who make at least $50,000 per year are significantly more likely to have a credit score of at least 700. And people who pull in $75,000 to $99,999 per year are in the sweet spot for a score that begins with a 7 or an 8. But note that it is possible to get into the 700-plus club if you earn less or wind up with a way lower score even if you make a lot more. Its all about spending within your means.
A Credit Score Of 704 Adds Up To Good News For Home Buyers
704! Thats the new, record-high average FICO credit score among millions of Americans, and its positive news for home buyers, sellers, lenders and the economy overall.
What it signifies, according to Ethan Dornhelm, FICOs vice president of scores and analytics, is that 10 years out from the housing bust and the global financial crisis, Americans are making more judicious use of credit. Theyre using less than the maximum amount of credit available to them, paying their monthly mortgages on time and exhibiting fewer glaring negatives in their credit bureau files.
FICO scores predict the probability that a borrower will default on a loan. They run from 300 indicating that the individual is extremely high-risk to 850, meaning almost no risk of default. A score of 704 is considered good and, along with other favorable factors in your application, will help get you approved for a mortgage although not necessarily at the lowest interest rate and fees available. A score of 750 will get you primo rates and terms, but a 450 will probably get your application tossed. In the mortgage arena, FICO scores are used by virtually all lenders, and are the only scores that two mega-investors Fannie Mae and Freddie Mac accept. They are also used extensively for credit-card, auto-loan and other loan applications.
A few noteworthy trends jump out of FICOs latest data on Americans scores:
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What Does A 704 Credit Score Mean And How It Affects Your Life
Having a 704 FICO score means that you are in a good position when trying to obtain credit. You will not have to use expensive dealer finance when trying to buy a car, you will be in a very strong position when applying for a mortgage and you will be able to get a large monthly limit on any credit cards.
However, you probably will not have access to the most exclusive offers and lowest cost finance rates which would be reserved for those in the excellent credit score group. They would not only be able to obtain cheaper finance, but also take out that finance over a longer period which reduces the size of the monthly payment that needs to be made.
Therefore, if you have a credit score of 704 it is worth trying to push it higher. Financial institutions use computer programs to make lending decisions. Moving your credit score higher means that the automated decision making in place will allow the credit professional you are dealing with to advance you more credit at a lower rate.
Financial institutions have a fixed amount of money they can lend to borrowers in each credit score category. This is known as their Risk Appetite. The limits and measures here are approved by the lenders Board of Directors so these limits are firm and cannot be changed easily.
The lending limits are generally higher the better the credit score of the borrower, so someone wishing to borrow a large amount had better have the best credit score possible.
Why Does The Average Credit Score Continue Growing
- People are becoming more credit smart
More Americans started to understand that their FICO scores significantly impact their finances. As a result, they started to pay more attention to it and work on improving it.
- Missed payments reported in the credit file are down
Data shows that as of July 2020, 7.3% of the population had a 90+ day past due missed payment in the past 6 months. Credit reports to all of those people have been affected.
Payment history makes 35% of your FICO score.
- Consumer debts have decreased
In July 2020, the U.S. consumer credit card debt averaged $6,004. This is down from the average credit card debt of $6,934 back in January 2020.
Many lenders shout down for a time. There are many reasons for that, including that people started to save more money, avoid unnecessary expenses, etc. Also, many lenders put higher approval requirements, which prevented many people from being approved for loans.
The number of accounts owed makes 30% of your FICO score.
- The FICO Score doesnât negatively consider forbearance/deferment agreements
Accounts reported as âcurrentâ with credit reporting codes related to forbearance or deferment or that the consumer has been affected by a disaster will not cause the FICO Score to drop. In fact, placing a consumer in forbearance or deferment and reporting the account status as âcurrentâ instead of âdelinquentâ will permanently ensure that the late payments wonât impact their FICO Score.
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How To Get A 750+ Credit Score
If you want to know how to improve your credit score, look no further than the Credit Analysis section of your free WalletHub account. Youll find grades for each component of your credit score, along with an explanation of where you stand and tips to improve. Getting your credit score to 700 is kind of like making the honor roll in school. You need mainly As and Bs to pull it off.
For example, heres a common credit scorecard for someone with a 750 credit score:
- Payment History: A = 100% on-time payments
- A = 1% – 10%
- Debt Load: A = < 0.28 debt-to-income ratio
- Account Age: B = Average account is less than 9 years old
- Account Diversity: A = 4+ account types or 21+ total accounts
- Hard Credit Inquiries: A = Fewer than 3 in past 24 months
- Collections Accounts & Public Records: A = 0 collections accounts and public records
You dont need to match this scorecard exactly to build a credit score of 700 or even higher. Different profiles can get the job done. For example, you might have an A in Credit Utilization but a B, or even a C, in Account Age. Its the complete picture that matters.
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Frequently Asked Questions About Credit Scores
Is 700 a good credit score?
Yes. A FICO score of 700 is above the average credit score in America and is considered good credit.
What is an average credit score?
The Average Credit Score in the U.S. is 704 as of 2019.
What credit score do I need to buy a house?
Most mortgage loans require a 620 credit score. However, borrowers with a 580 credit score may qualify for an FHA loan with 3.5% down.
What is the highest credit score?
850. Credit score ranges from 350 to 850.
What is considered a good credit score?
There is no definition of a good credit score generally, a 700 credit score is considered good.
What credit score do I need to buy a car?
At major dealerships, you typically need fair credit of 640 to get approved for an auto loan.
What is the credit score range?
The credit score scale will depend on which type of credit scoring model is being used. FICO is the most commonly used model the FICO credit score range is 350-850.
What is an acceptable credit score?
A 620 credit score is typically the minimum credit score you need to get a mortgage. You can also get a car loan with a 620 credit score but expect your interest rates to be much higher than someone with an excellent credit score.
What is a good credit score to buy a house?
FHA Loans require a minimum credit score of 580 or higher with a 3.5% downpayment. You may be able to buy a house with a credit score as low as 500.
What is considered bad credit?
Is there a way I can improve my credit score?
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Other Ways To Improve Your Credit Score
When it comes to your credit history, you want to make sure your information is correct. You can do this by checking your credit report every year. There are three national credit bureaus in the United States Equifax®, Experian and TransUnion®. You can request one free credit report per year from each of them at AnnualCreditReport.com, the only official site authorized by federal law to provide them. If you see any discrepancies, contact the bureau and dispute them any items in question must be investigated.
You should also monitor your credit score continuously throughout the year, at least once per month. Many credit scoring and personal finance sites update your score monthly or even weekly and may provide additional features to help you improve your score. On Rocket HomesSM, youll get a free TransUnion credit report and VantageScore credit score, along with a number of features to help you improve your credit. These include a credit score simulator that allows you to see what actions can help or hurt your credit score, and by how many points. You will not be penalized for reviewing your credit reports, disputing any issues or monitoring your credit score.
Is There An Actual Difference Between Fico Score And Credit Score
Both FICO and credit score use a different but very close algorithm. That is why these values vary slightly but are very close. So is there an actual difference between FICO and credit score?
In a material sense â no.
While FICO consolidates anonymous data from credit bureaus, a Vantage Score is generated from a combination of consumer credit filings.
As well, each of their final scores is calculated using almost the same factors.
- Payment history.
- Recent inquiries.
But which one will my lender use?
Most lenders use FICO scores. However, some use other types of credit scores, and others use their own risk models.
In the end, the correct answer is â ask them.
Here are the most popular scoring models.
But what is much more important is not this small difference.
What is important is that the average credit score continues to grow!
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The Different Types Of Credit Scores
The three main credit bureaus are Equifax, Experian, and TransUnion. Each bureau gives you a score, and these three scores combine to create both your 704 FICO Credit Score and your VantageScore. Your score will differ slightly among each bureau for a variety of reasons, including their specific scoring models and how often they access your financial data. Keeping track of all five of these scores on a regular basis is the best way to ensure that your credit score is an accurate reflection of your financial situation.
Shopping For Credit Cards With A 704 Credit Score
When shopping for credit cards, make sure you explore all of your options. In other words, dont just sit down with one potential creditor and decide to accept their deal or not. Sit down with multiple potential creditors and compare and contrast them to find out what works best for you.
If you already have a credit card, but have been shopping for one that is cheaper, you can then go to your existing creditor and request them to either match or beat an offer from another credit card company. Tell them that you believe you are paying too much money in fees and interest, and ask them if they are willing to lower their rates and fees down to the other credit card company that you are thinking about switching to.
If they refuse, then you can switch accounts, but dont close your existing account immediately. You still want to make the minimum payment on. it while you are waiting for your balance to transfer to your new account. You only want to close a credit account when your balance is at zero.
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Shield Your Credit Score From Fraud
People with Very Good credit scores can be attractive targets for identity thieves, eager to hijack your hard-won credit history. To guard against this possibility, consider using credit-monitoring and identity theft-protection services that can detect unauthorized credit activity. Credit monitoring and identity theft protection services with credit lock features can alert you before criminals can take out bogus loans in your name.
was the most common form of identity theft , followed by employment or tax-related fraud , phone or utilities fraud , and bank fraud in 2017, according to the FTC.
How To Get A 704 Credit Score
While theres no sure-fire way to achieve an exact credit score, theres plenty you can do to build and maintain your credit within a range. Most importantly, youll want to practice healthy credit habits.
Even with so many different credit scores out there thanks to different scoring models and different credit bureau data some general principles apply. Most credit scores take into account at least five main credit factors.
Heres a breakdown of each factor and how it can affect your overall credit.
Dont Apply For Multiple Credit Cards
This is standard advice any time you apply for credit of any type . If you put in multiple applications, you can actually hurt your chance of being approved.
Each lender will have access to your credit report, which will show that youve applied elsewhere. Those applications will show up as inquiries. Too many inquiries can actually drop your credit score. Maybe it wont be by a lot, but it could be enough to put you into a lower credit score range.
Pick the card you want most, and apply for it. If youre turned down, or you dont like the terms, only then should you apply for another card.