What Does A 734 Credit Score Get You
|Type of Credit|
*Based on WalletHub data as of Oct. 7, 2016
As you can see, the majority of us are in the top two tiers of the credit-score range. A lot of people dont know where they stand, though, considering that 44% of consumers havent checked their credit score in the past 12 months, according to the National Foundation for Credit Counseling. If youre one of them, you can change that by checking your credit score on WalletHub.
Why Your Credit Score Matters
There are real benefits to staying on top of your credit score.
Thats because a strong credit score can translate into real perks, like access to a wider range of products and services including loans, credit cards and mortgages. You could also enjoy better interest rates and more generous credit limits. Meanwhile, if your credit score isnt quite where you want it to be, knowing the score is the first step to improving it.
Either way, it pays to know your credit score. Its your financial footprint the way companies decide how financially reliable you are. A higher credit score means lenders see you as lower risk.
Credit Score Mortgage Loan Options
A conventional mortgage usually requires a minimum credit score of 620. This means that with a score of 734, you have a high probability of being approved for a mortgage loan. But lenders wont be offering you the best interest rates out theresome experts suggest that you need score of 760 to get those.
Its important to note that having a score of 734 doesnt guarantee youll be approved for a mortgage. People who have insufficient income or a history of filing for bankruptcy can still be denied loans, mortgages or credit cards even with a good score.
If youve been denied a mortgage with a 734 score, you can check if you qualify for a USDA loan or a VA loan. Otherwise, youll have to improve your credit score, increase your down payment or speak to your lender on how you can work toward a mortgage approval.
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What Is A Good Credit Score
What is considered a good credit score? :59
Reading time: 3 minutes
Theres no magic number to reach when it comes to receiving better loan rates and terms
Its an age-old question we get, and to answer it requires that we start with the basics: What is a, anyway?
A credit score is a number, generally between 300 and 900, that helps determine your creditworthiness. Credit scores are calculated using information in your , including your payment history the amount of debt you have and the length of your credit history.
Its also important to remember that everyones financial and credit situation is different, and theres no magic number to reach when it comes to receiving better loan rates and terms.
There are many different credit score models used today by lenders and other organizations. These scores all have the same goal: to predict a consumers likelihood to pay their bills. There are some differences around how the various data elements on a credit report factor into the score calculations.
Although credit scoring models vary, generally, credit scores from 660 to 724 are considered good 725 to 759 are considered very good and 760 and up are considered excellent. Higher credit scores mean you have demonstrated responsible credit behaviour in the past, which may make potential lenders and creditors more confident about your ability to repay a debt when evaluating your request for credit.
How Do Your Actions Impact Credit Scores?
What Is A Good Credit Score For A Credit Card
Like other lenders, credit card issuers will consult your credit score to determine the risk of doing business with you before approving you for a new credit card. If you want to open a premium travel rewards credit card, you may need good and perhaps even excellent credit scores to qualify. For other types of credit cards, even some with 0% introductory APR offers, a good credit score may be sufficient to be approved for the card.
Beyond qualifying for a credit card, your score can also have a significant impact on the APR and other terms of your account. Credit card issuers not only rely on credit scores to help them determine whether or not to approve applications, but they also use scores to set the pricing on the accounts they approve.
Take this list of top credit cards, for example. Youll notice that every credit card offer features not a specific rate, but rather an APR range. A card issuer might advertise an APR of 13.49% to 24.49%. The reason for that range is because the card issuer will base the final rate it offers you on the condition of your credit.
Defining a specific number that a credit card issuer defines as a good score is tough for two reasons:
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Getting A Mortgage With A 734 Credit Score
At React Mortgage we encompass A to Z lending. Meaning we source solutions and help in any situation when it comes to your borrowing needs:
To start off, a 734 credit score is considered good. So just keep that in mind as youre shopping around for a mortgage. A lot of borrowers dont know this, but there is no set minimum credit score required to buy a house. Many lenders set their own credit score requirements, which is why it pays to go through a broker instead of a bank. With Banks, you are stuck with them as the lender, but brokers can shop around many, if not hundreds of lenders to find the right one for your situation. Now take your good score of 734 many lenders would jump at the opportunity to get your mortgage. Its all about finding the right one.
There are other factors that lenders consider besides credit score when looking at your situation. For example:
- How much you have saved for a down payment
- Debts you may have in collections
- What your income level is
- Your overall amount of debt
These factors, along with your 734 score will help lenders determine what you are eligible for when it comes to a home loan. Now for your score, wed recommend to look at conventional loans as they may give you a more favorable rate and lower mortgage Insurance.
Remember, your 734 is made up of the following 5 things:
- Payment History 35%
- Type of Credit 10%
What Is A Good Credit Score For An Auto Loan
Next to a mortgage, vehicles are often among the most expensive purchases the average adult makes in the United States. According to the Kelley Blue Book, an independent automotive valuation agency, the average price for a light vehicle purchase in the U.S. was $38,940 in May of 2020.
For a significant purchase like a car, having good credit could mean saving thousands when youre financing your purchase.
For example, someone with a FICO score of 620 who is looking to buy a new car is told by the car dealer they could qualify for a 60-month loan for $38,000.
According to the FICO Loan Savings Calculator, your loan in June 2020 would have an APR of 16.714% and your monthly payments would be $939. Over the life of the loan, youd pay an additional $18,315 in interest.
A $942 per month car loan payment is a significant amount, even if you can get approved. So, lets assume you hit the pause button and decide to work on improving your credit before taking out a loan. When you apply again down the line, you learn that youve boosted your score to a 670, which is considered a good credit score by most credit scoring models.
With a 670 credit score, the FICO Loan Calculator now estimates that you might qualify for an APR around 7.89%. Based on that rate, your monthly payment on the same $38,000 auto loan would be $768. You would pay $8,106 in total interest over the life of your loan.
Because you improved your credit score from poor to good, you would save:
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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 7 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 .
How To Improve Your Credit Score
The steps you can take to rebuild your credit score fall into two categories:
- Short-term credit fixes: Things you can do right now to improve your score in the short term
- Long-term solutions: Things you can do to help strengthen your score in the long term
Ultimately, how long it will take to repair your credit depends on your credit history, your personal finances, and the decisions you make.
Is Your Credit Score Average For Your Age
Given that younger borrowers may not have a long history of credit to drive their credit score up, it shouldn’t be surprising that average credit scores for American borrowers improve throughout their lifetime. As borrowers mature, they also become more aware of the factors that drive credit score improvement and are motivated to increase their scores to allow home purchases and other large investments that require loans or lines of credit.
Paying Your Bills On Time
While paying each of your bills on time may seem like the most obvious way to improve your credit score, its also the most important one. There is nothing that will harm your credit score as much as having a series of late payments on anything from car loans to mortgage loans. This is why it is extremely critical that you always make the minimum monthly payments by the determined date each month WITHOUT ANY EXCEPTIONS.
Even skipping just one mortgage payment is going to have a detrimental effect on your credit score. Sorry if that sounds cruel, but its the truth, and it should serve as your primary source of motivation for making your payment on time.
Heres an important fact to keep in the back of your mind: every time that you fail to make a monthly payment when you are required to do so, whether it be on a car or your home or anything else, it will be on your credit history and thus impact your credit score for up to seven years. Seven years. Think about that.
Now, one primary benefit to using a credit card here is that you can choose how much money you spend while using them, and then also determine how much you pay back each month, so long as that amount is equal or greater than the minimum payment you owe.
The reason why this is a benefit to you is because it allows you to budget your money accordingly and make the smartest financial decisions you can. In other words, you can avoid going into serious debt.
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What Is The Average Credit Score In America
The average credit score in the U.S. is at an all-time high of 711. This coincides with what the Consumer Financial Protection Bureau defines as “prime.”
About 1 in 5 American adults either have no credit history or are unscorable. As a result, these individuals will have difficulty obtaining new lines of credit.
In the eyes of lenders, credit scores fall into several buckets, which indicate how risky it may be to extend credit to an individual. Outside of playing a role in approvals for a loan or credit, these scores can also impact an individual’s lending terms. Perhaps the most important terms among those are interest rates.
The higher an individual’s credit score, the lower their quoted APR will typically be.
FICO credit scores break down in the following manner:
- 800 to 850: Exceptional
- 300 to 579: Very poor
This means the average credit score of 711 is in the good range.
Though the average credit score has generally improved since 2005, slight dips were seen around the Great Recession that ended in 2009. A large number of people declaring bankruptcy or defaulting on their loans would have caused their credit scores to plummet, which in turn would have affected the overall average.
+ 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.
What Does Not Count Towards Your 734 Credit Score
There are many things that people assume go into their 734 credit scores but that actually dont. Examples include how much money you earn, your age, your marital status, your child support payments , how much money you have donated to charity, where you work or live, or your employment history.
None of these things or anything like them do anything at all to your credit score, so instead, focus on the five primary factors that we outlined and discussed above.
Now that you know what counts towards your overall credit score and what does not, you should know exactly what you need to pinpoint in order to enhance your score. For example, maybe one reason your credit score is low is because youve opened several new accounts of credit.
Regardless, its important at this stage for you to positively identify what it exactly is that is lowering your credit rating. Once you have identified what that is, you can start to formulate a plan.
Auto Loans For Good Credit
The best rates for auto loans are typically available to people with good-to-excellent credit, but what good credit means to auto lenders can vary. Beyond the base credit-scoring models like FICO and VantageScore, there are also industry-specific scores that lenders could check, such as FICO® Auto Scores.
Even though you may not know which specific score a lender will use, its still a good idea to have an understanding of your overall credit health when shopping around. You can check your credit from Equifax and TransUnion for free on . You can also periodically get a free credit report from each of the three main consumer credit bureaus from annualcreditreport.com.
And yes, its important to shop around! Take some time to compare offers to find the best terms that could be available to you. In particular, the rates offered at car dealerships may be higher than rates you might be able to find at a bank or credit union, or with an online lender.
If youre shopping around for auto loan rates, consider getting preapproved to boost your negotiating power when youre at the dealership. A preapproval letter can be a great way to show car dealers youve done your homework and wont accept a subpar financing offer. Just be aware that it can result in a hard inquiry, which can temporarily ding your credit.
And if you already have a car loan but youve improved your credit since you first got it, you might be able to find a better rate by refinancing.
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Your Credit Report Contains The Following Information
- Identity verification
Each of your credit accounts will be given a rating that includes a letter and a number.
|Installment||Accounts that receive an I are installment style accounts that are paid off in predetermined fixed amounts. For example, a car loan.|
|Open||Accounts that receive an O are open, which means they can be used up to a preset limit. An example of an open credit account is a line of credit.|
|Revolving||Accounts that receive an R are considered revolving credit because your payments change based on how much of your limit you borrow. A credit card would receive an R.|
|Mortgage||Depending on the credit bureau you pull your report from, your mortgage may or may not show up. If it does, it will be represented by an M.|
|Account is in collections or bankruptcy|
Did you know that bad credit can affect your daily life? Learn more here.