Credit score is one of the most significant figures in a person’s credit profile. It affects everything ranging from approval of credit cards and loans, the interest rates and much more. Well, first of all, let us understand what a credit score of 709 really means and how it would affect you.
Credit is an essential aspect of people’s lives since they require credit in numerous situations, including when buying household appliances, automobiles, and even real estate, therefore understanding what a good credit score is is significant.
Credit score is a numerical representation and usually falls between 300 and 850. In general, higher scores are preferred and show lenders that you are a lower risk credit. Here is a breakdown of the credit score ranges:Here is a breakdown of the credit score ranges:
800-850 - Exceptional
740-799 = Very Good
670-739 - Good
580-669 - Fair
300-579 - Poor
I trust that by now, you realize that credit score of 709 is in the good credit rating bracket. It is slightly above average and shows that one has been a responsible borrower of credit. Exemplary credit is 720 and above, but a 709 rating will also let you access most of the loans and credit cards at reasonable APRs.
Why Your 709 Credit Score is Important and How Various Factors Can Affect It
The 709 credit score is made up of five categories. Here’s a quick overview:
1. Repayment History – records your payment behavior. Since payment history tends to be the most important factor, a couple of late payments could significantly affect your score.
2. Credit Utilization – determines the lending capacity and the proportion between credit that is due as well as the total credit limits. Credit utilization ratio: Balances above 30% are detrimental to your credit score.
3. Length of credit history - calculates the average of your accounts’ age. This average can be reduced by new credit.
4. New Credit – when you open several new accounts, it may be interpreted as greater credit risk and can lower your score.
5. Credit Mix – reveals what kind of loans and credit cards you have. Combining type enhances the score.
How to enhance your credit score to 709?
Although the credit score of 709 is already good, it is beneficial to increase it even higher for many reasons. Here are some tips to improve your credit:Here are some tips to improve your credit:
Always settle all the bills on time – one should organize themselves to make sure they pay all their bills at the due dates to avoid incurring penalties.
Paying balances on credit cards and lines of credit - Only carry a small amount of debt on all credit cards and lines of credit when compared to their respective credit limits. Ideal is to aim for a maximum of 30 percent or less.
Reduce credit utilization - Only apply for credit when necessary, and allow current credit to remain unpaid for as long as possible.
Dispute reporting errors – Examine all three credit reports thoroughly and challenge any errors to the bureaus.
Regular credit check – One can subscribe to the service to get updates on changes or any suspicious activity on their credit profile.
The Takeaway
High credit score of 709 shows lenders that you are capable of paying your debts as and when due. It is, however, slightly weaker than the excellent credit of 720 and above but a 709 FICO score grants you a shot at some of the best rates on lending products. While it is possible to constantly improve your credit rating over time with some strategy and dedication, you can still build your credit profile. By using a free site such as Credit Karma, you can track your score and do those activities that help build credit.
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