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Is 716 A Good Credit Score

What Does A 716 Credit Score Mean And How It Affects Your Life

Maintaining a strong credit score

Having a 716 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 716 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.

Percent Of Credit Files That Dont Qualify For A Fico Score

The Ascent reports that data released in 2019 found 11 percent of Americans dont qualify for a FICO credit score5.

In order to qualify for a FICO score, you must have:

  • At least one credit account that has been open for at least six months
  • At least one account that has reported to credit bureaus within the past six months
  • No deceased status on your account6

If you share a credit card or other types of credit with someone who has passed, this may account for the deceased status thats preventing you from receiving a FICO score on your credit report. Watch your credit with a credit reporting agency like Experian to report this.

How To Get A Good Credit Score

Good credit habits, practiced consistently, will build your score. Heres what you need to do:

  • Pay bills on time. This is important because payment history has the largest impact of all the factors in your score. A missed or late payment can do tremendous damage to a credit score and it can stay on your credit report for up to seven years.

  • Try to keep your credit card balances well below your credit limits aim for, and lower is better. High utilization dings your score, but the damage will fade when you’re able to reduce your balances and the lower utilization shows up on your credit reports. You also may be able to lower utilization by getting a higher credit limit or becoming an authorized user on a lightly used card with a large limit.

  • Keep credit accounts open unless there is a compelling reason, such as high fees or poor service, to close them. Keeping older accounts open helps your average age of accounts, which has a small influence on your score. Also, closing an account cuts into your overall credit limit, driving up your credit utilization.

  • Avoid making several credit applications in a short time frame. Credit checks for the purpose of credit decisions can cause a small, temporary dip in your score, and several in a short time can add up. That’s why it’s important to research credit cards before you apply.

  • Monitor your credit reports and dispute information you believe is incorrect or too old to be included .

Also Check: How To Unlock My Experian Credit Report

The Credit Score Needed To Buy A Car

According to Investopedia, the average credit score you will need to purchase a car is 661 and above15.

You may be able to find financing options with a bad credit score, but you will generally need a cosigner or more money to put down towards your car loan when you have bad credit since you are a nonprime or subprime borrower.

You should also consider the role insurance scores play in your car buying journey as credit scores help insurance companies assess risk when you apply for insurance. Make sure your credit score is correct with Experian or other bureaus before you apply for insurance.

So Can I Lease A Car With A 716 Credit Score

What is a good credit score according to you?

There are two kind of leasing deals namely the normal deal and the promotional deal. A promotional car lease deal is one offered via auto makers and their merchants temporal period . The arrangements are vigorously promoted and can be seen on car organization sites.

As a rule, these extraordinary arrangements depend on lessened costs, and helped lease-end residual value. Besides, there might be mileage confinements and up-front installment to be required. When you will try to lease a car with 716 credit score, keep in mind that only people with good or excellent score point are entitled to this promotion the reason being that most car companies go on loss because some people do not fulfill the lease agreement most of the time.

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What Factors Affect Your Credit Score

Your credit score is comprised of five factors: payment history, amounts owed, length of credit history, new credit, and credit mix.

If your FICO Score is 700 to 749, youre probably perfect or near-perfect in the payment history category. At worst, you may have one or two 30-day late payments in your distant past, but nothing recent.

In this credit score range, is likely to be a bigger factor. Its the amount you owe on your credit cards, divided by your total credit card limits.

For example, if you owe $5,000 in credit card debt, and you have $20,000 in credit card limits, your credit utilization ratio was 25%. Any number below 30% is considered good.

How Your 716 Credit Score Was Calculated

As mentioned earlier, the two main credit scoring models are FICO and VantageScore. Although the two models have minor differences, both calculate credit scores based on the following factors:

  • Payment history:Late payments lower your credit score. The later the payment, the more damage it will do. Charge-offs, collection accounts, and bankruptcies are even more damaging to your score.
  • : This refers to the proportion of your available credit that youre using . A lower utilization rate is better for your credit score. Many experts recommend keeping yours below 30% . VantageScore recommends keeping your credit utilization even lower, under 10% if possible. 1
  • Length of credit history: This is determined by the age of your oldest and newest credit accounts as well as the average age of all of your accounts. Old accounts that youve had for many years boost your credit score, whereas new accounts lower it.
  • : Your credit score will be lower if you dont have a balanced mix of revolving credit accounts and installment accounts .
  • New accounts: When you apply for a credit card or loan, the lender will run a credit check. This will trigger a hard inquiryHard inquiries take a few points off your credit score, and the effect lasts for up to 12 months. 2 Actually opening the account can further hurt your score and have even longer-lasting effects.

To maintain your good credit score, follow these tips:

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Get A Secured Credit Card

As mention earlier, getting a secured credit card is a great way to establish credit. Secured credit cards work much the same as unsecured credit cards. The only difference is they require a security deposit that also acts as your credit limit. The credit card issuer will keep your deposit if you stop making the minimum payment or cant pay your credit card balance.

Charge No More Than You Can Easily Repay When The Bill Comes In

How to capitalize on credit score boom

This really gets to the mechanics of paying off your balance each month. If you have room in your budget to pay $500 per month toward your credit card bill, then thats as much as you should charge on it. It makes it less likely youll need to carry a balance.

Remember, using a credit card responsibly does not mean maxing out your available credit every month!

Read Also: How To Check My Experian Credit Score

New Credit And Credit Mix

Coming in at 10 percent with FICO and less influential for VantageScore are new credit accounts. Just like closing old accounts, you want to be careful about opening new ones. Opening new accounts creates uncertainty and can signal increased risk to lenders, which will bring your score down, at least in the short term.

As for credit mix called credit experience by VantageScore this is really where VantageScore and FICO differ. FICO only considers credit mix as 10 percent of your credit score while VantageScore weighs it as highly influential. This area accounts for the variety of credit extended to you, including credit cards, mortgages, student loans and car loans.

Why Good Credit Scores Matter

While credit scores help determine your availability of credit and the rate youll pay to access it, what it really measures is your statistically proven likelihood of defaulting on the money you borrow. The greater the risk, the lower your score and the more youll pay to access credit if you can access any at all.

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Watch How Much Credit You Use

30 Credit Score Statistics for 2021

The less of your credit limits you use, the better it is for your score. It helps to think of your spendable credit as a lot less than your actual . Most credit experts recommend keeping your balances at less than 30% of your credit limits and lower is better. The highest scorers keep theirs at less than 10%.

Read Also: How To Improve Your Credit Score In 30 Days

Achieve Your Ideal Credit Score

The average credit score by age varies greatly across generations, but this is simply the average. Theres nothing saying you must be average. With the tips listed above, you can work to build your score even higher than the average.

If credit card debt is holding you back, the Tallycredit card debt repayment app can help. Our app helps you manage your credit card payments, and Tally offers a lower-interest personal line of credit, allowing you to efficiently pay off higher-interest credit cards.

To get the benefits of a Tally line of credit, you must qualify for and accept a Tally line of credit. The APR will be between 7.90% and 29.99% per year and will be based on your credit history. The APR will vary with the market based on the Prime Rate. Annual fees range from $0 to $300.

A 716 Credit Score Is Considered A Good Credit Score By Many Lenders

Percentage of generation with 700749 credit scores
Generation
14.7%

Good score range identified based on 2021 Credit Karma data.

A credit score is a number that lenders use to help assess how risky you might be as a borrower. Credit scores are based on credit reports, which contain information about your credit history. Generally, a good credit score can signal to lenders that youre more likely to pay back money you borrow.

Having good credit can be a game-changer. It can mean youre more likely to be approved when you apply for a credit card or loan. Good credit can also help you qualify for lower interest rates and better loan terms.

Its not quite as simple as that though. You dont have just one credit score. Heres why. Scores can be calculated using different scoring models, like the ones created by FICO and VantageScore. These credit-scoring models use several factors to generate your scores, drawing on data from different sources, namely the three main consumer credit bureaus . So there are actually many different versions of your credit scores.

With so many different credit scores out there, what counts as a good credit score can vary. What one model or lender defines as good could be different from what other models or lenders define as good.

Heres what you need to know about building and maintaining a good credit score and, if youre aiming higher, how you can eventually take that score from good to excellent.

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How To Keep On Track With A Good Credit Score

Having a Good FICO® Score makes you pretty typical among American consumers. That’s certainly not a bad thing, but with some time and effort, you can increase your score into the Very Good range or even the Exceptional range . Moving in that direction will require understanding of the behaviors that help grow your score, and those that hinder growth:

Late and missed payments are among the most significant influences on your credit scoreand they aren’t good influences. Lenders want borrowers who pay their bills on time, and statisticians predict that people who have missed payments likelier to default on debt than those who pay promptly. If you have a history of making late payments , you’ll do your credit score a big solid by kicking that habit. More than one-third of your score is influenced by the presence of late or missed payments.

Utilization rate, or usage rate, is a technical way of describing how close you are to “maxing out” your credit card accounts. You can measure utilization on an account-by-account basis by dividing each outstanding balance by the card’s spending limit, and then multiplying by 100 to get a percentage. Find your total utilization rate by adding up all the balances and dividing by the sum of all the spending limits:

Balance
$20,000 26%

39% Individuals with a 716 FICO® Score have credit portfolios that include auto loan and 31% have a mortgage loan.

What To Do Before Applying For A Credit Card If Your Fico Score Is 700 To 749

5 Best Experian Credit Score To Get $10k American Express Credit Card.

Even if youve been in the 700 to 749 credit score range for a long time, never assume thats still the case. Credit scores are a moving target! The score you have today will be different a month from now, and again a year from now.

For that reason, there are a few steps you should take before you even make application for a credit card.

Read Also: What Does Settled Mean On A Credit Report

What A Very Poor Credit Score Means For You:

Most of the major banks and lenders will not do business with borrowers in the “very poor” credit score range. You will need to seek out lenders that specialize in offering loans or credit to subprime borrowers andbecause of the risk that lenders take when offering credit to borrowers in this rangeyou can expect low limits, high interest rates, and steep penalties and fees if payments are late or missed.

In this “very poor” credit score range, 30-year mortgages may not even be possible, auto loans can have high interest rates and only a select few credit cards may be made available. A “very poor” credit score could also prevent you from obtaining a rental home or apartment, increase the security deposits required for your utilities, or prevent you from getting a cell phone contract: all which mean additional costs for you in the long run.

Interest Rates And Your Credit Score

While theres no specific formula, your credit score affects the interest rate you pay on your mortgage. In general, the higher your credit score, the lower your interest rate, and vice versa. This can have a huge impact on both your monthly payment and the amount of interest you pay over the life of the loan. Heres an example: Let’s say you get a 30-year fixed-rate mortgage for $200,000. If you have a high FICO credit scorefor example, 760you might get an interest rate of 3.612%. At that rate, your monthly payment would be $910.64, and youd end up paying $127,830 in interest over the 30 years.

Take the same loan, but now you have a lower credit scoresay, 635. Your interest rate jumps to 5.201%, which might not sound like a big differenceuntil you crunch the numbers. Now, your monthly payment is $1,098.35 , and your total interest for the loan is $195,406, or $67,576 more than the loan with the higher credit score. A mortgage calculator can show you the impact of different rates on your monthly payment.

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What Does A 716 Credit Score Mean

A credit score of 716 means that your credit reports show that you usually pay your bills on time. It indicates to lenders that youre a low-risk borrower. In FICO and VantageScore, the main scoring models used by US credit bureaus, 716 is classed as a good credit score.

Although a 716 credit score is much higher than the lowest credit score of 300, its still far from the highest credit score of 850.

Check out the image below to see how your score compares with the average for different generations.

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