A credit score indicates to credit-granting companies your creditworthiness in terms of loan repayment. It falls between 300 and 850. The scores range generally from 300 to 850. Having a 700 credit score tells the lenders you are low-risk and will pay back your debts in whole.
Based on Fair Isaac Corporation's or Fico's credit scoring systems, a good credit score is any number higher than 720.
Good credit scores range from 670 to 739 using FICO. Among the most often used credit scoring systems, FICO also takes 670–739 into account as a decent range. Thus, a credit score of 700 or more falls into the credit range of "good." If your credit score is 700 or above, you may be confident you have a solid credit history and should pay for the credit either before the due dates or on time.
Why having a 700 Credit Score is Advantageous
Those with a credit score of 700 may therefore obtain the greatest loans and interest rates available on the market. Lenders see consumers with low 700s as low-risk, therefore you may qualify for rewards credit cards, mortgages, auto loans, and other lines of credit with the finest conditions, including Lenders see low 700s as low-risk, hence you may qualify for rewards credit cards, mortgages, auto loans, and other lines of credit with the best terms:
- Lower interest rates. Getting to a 700+ indicates that lenders will give you their best rate, which will greatly benefit you in the long run in the case of the major credit products including mortgages and automotive loans where savings on interest are enormous.
- Larger loan amounts. Lenders are indeed willing to approve a high amount of loan to borrowers with a 700+ credit score since this credit score is perceived to be a low-risk credit. This increased borrowing capacity empowers you and it means that you have more freedom to make choices.
- Better approval odds. This means that if you can score 700 you will have your loan application approved almost in any bank. When the applicant falls in the 700-759 FICO score range, only 7% were denied credit when obtaining a mortgage while applicants with scores less than 670 were more likely to be denied mortgages at nearly 20%.
- What Negative Implication Does A 700 Credit Score Have?
- This means that having a score of 700 communicates a very low credit risk to any entity that you would wish to borrow from. It states that you are trustworthy to pay back the debts responsibly and without fail in the next several years. Specifically, a 700 score indicates: Specifically, a 700 score indicates:
- Lengthy credit history. You have had credit for many years and managed credit well over most of the time that you have been in credit. This shows reliability in terms of business cycles, which is the key to achieving higher results consistently.
- Credit mix The credit mix refers to the combination of credit that the individual uses, where credit is divided into three categories: revolving credit, installment credit, and paid credit. It contains details of the installment credits such as auto, mortgages, student, and revolving credits including credit cards. A responsible attitude to credit as a sum of credit types is also a plus for lenders.
- Low balances. They use low percentages of their total credit limits, often close to the minimum payment amount. These are wrong in the sense that they can bring about some poor scores if you always carry high balances.
- No missed payments. You maintain a good payment history where you always pay at least the minimum amount due on each of the credit accounts by the billing date. A major negative impact of delayed payments is that it significantly hurts credit scores.
- Limited hard inquiries. Credit is only sought when required, and there is tight control over its usage. For every application a credit check is done, which is a hard inquiry and can reduce scores by a few points for up to two years. This means that many signals can trigger risk, and therefore, too many inquiries can be considered a sign of risk.
How to enhance your credit score for a better 700
Even though 700 can be considered good, there are some suggestions on how to increase the score even further. A credit score of 740 or 760+ will enable one to achieve better interest rate reductions and better prospects of accessing premium credit products. Tips for boosting your score from 700 include:
- It is always good to pay bills on time when due or just after the due date. You must always remember the due dates and pay at least the minimum amount stated in your credit card statement every month without exceeding the due date. If it makes things easier then it is advisable to pay on an automatic basis.
- Keep balances low. Minimum credit utilization, particularly exceeding 30% of the credit limit to any credit card, is unhealthy for scores. Make sure to pay credit cards as soon as possible and if possible, use balance transfers to retain a low credit card utilization rate.
- Limit hard inquiries. A credit check should not be applied often, this should only be done when one is looking for credit. A high number of inquiries can be another reason to lower your credit score as it may point to risk. Get quotes for a mortgage, or an auto loan, for instance, within a limited time say two weeks, to cluster inquiries and reduce the effect on the credit score.
- Correct errors. Negotiate with the credit reporting agencies to over any discrepancies that may be pulling down your score. Report errors: do not let them slip away.
The Takeaway
A credit score of 700 indicates that when approaching any credit organization, the company knows you are extremely creditworthy and that the likelihood of you becoming a chronic late payer or defaulter of credit obligations is nearly zero. It provides access to low-interest-rate prime loan borrowing. Although the score is acceptable enough, kindly be aware that there are methods to raise it somewhat going forward. Credit ratings should be closely watched; avoid asking for credit; pay your bills on time; and make sure your credit use is limited.
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