Your score falls within the range of scores, from 670 to 739, which are considered Good. The average U. S. FICO® Score, 714, falls within the Good range. Consumers with good credit scores are seen by lenders as “acceptable” borrowers, and they may be offered a range of credit products, though perhaps not at the lowest possible interest rates.
Approximately 9% of consumers with Good FICO® Scores are likely to become seriously delinquent in the future.
A 720 credit score is a sweet spot in the credit world. It’s not quite the elite 850, but it’s definitely a notch above average placing you firmly in the “good” to “excellent” credit category. This score opens doors to a plethora of financial opportunities, allowing you to unlock lower interest rates better loan terms, and access to exclusive credit cards.
Let’s get specific: What can you really accomplish with a 720 credit score?
Home Loans:
- YES, you qualify! A 720 score is sufficient for securing a government-backed mortgage, such as an FHA or VA loan. However, it might not be high enough to snag the lowest interest rates.
Personal Loans:
- Another YES! A 720 score puts you in a favorable position for obtaining a personal loan with competitive interest rates. However, remember that lenders consider various factors beyond your credit score, so approval isn’t guaranteed.
Auto Loans:
- You’re in! With a 720 credit score, you’ll qualify for favorable auto loan rates, saving you money on your new car. However, compared to someone with a higher score, you might pay slightly higher interest rates.
No Annual Fee Credit Cards:
- Absolutely! A 720 score grants you access to a wide range of no annual fee credit cards, offering valuable rewards and perks.
Beyond the Basics:
- Lower insurance premiums: Your credit score can even impact your insurance premiums. A 720 score can lead to lower insurance rates on your car, home, and even life insurance.
- Apartment rentals: Landlords often check credit scores before approving tenants. A 720 score can help you secure a better apartment with lower deposits or more flexible lease terms.
- Utility services: Some utility companies consider credit scores when setting deposits or offering discounts. A 720 score can help you avoid hefty deposits and access better deals.
Boosting Your 720 Score:
- On-time payments: This is the golden rule. Paying your bills on time consistently is the single most impactful factor in improving your credit score.
- Keep balances low: Aim to keep your credit card balances below 30% of your credit limit. This demonstrates responsible credit management.
- Apply for credit sparingly: Avoid applying for multiple credit cards or loans within a short period. Each application generates a hard inquiry, which can temporarily lower your score.
- Keep old accounts open: The age of your credit accounts contributes to your score. Consider keeping older accounts open, even if you don’t use them frequently.
- Monitor your credit reports: Regularly check your credit reports for errors and dispute any inaccuracies. This ensures your score accurately reflects your creditworthiness.
Remember, a 720 credit score is a stepping stone, not a destination. By putting these tactics into practice, you can keep raising your credit score, which will open up more financial options and help you reach your financial objectives.
Additional Resources:
- NerdWallet: https://www.nerdwallet.com/article/finance/720-credit-score-is-it-good-or-bad
- Experian: https://www.experian.com/blogs/ask-experian/credit-education/score-basics/720-credit-score/
Disclaimer: This information is for educational purposes only and should not be considered financial advice. Please consult with a qualified financial professional for personalized guidance.
How to build up your credit score
Because of your strong FICO® score, you have a decent chance of being approved for a range of loans. However, you may be able to qualify for better interest rates and save thousands of dollars in interest over the course of your loans if you can raise your credit score and eventually fall into the Very Good (740-799) or Exceptional (800-850) credit-score ranges. Here are few steps you can take to begin boosting your credit scores.
Consider credit score monitoring. Continually tracking your FICO® Score can provide good reinforcement for your score-building efforts. Rewarding consistent growth while acknowledging that sporadic setbacks are normal can serve as a useful reminder to uphold sound credit practices. Additionally, monitoring will notify you of any abrupt drops in your credit score, which could indicate that there has been unauthorized activity on your credit accounts.
Avoid high credit utilization rates. High credit utilization, or debt usage. According to this measurement, the FICO%C2%AE%20scoring%20system%20bases%20your%20credit%20score%20on%20this%20measurement%E2%80%94, which is the percentage of your available credit limit that is represented by your outstanding payment balances. Try to keep your utilization across all your accounts below about 30% to avoid lowering your score.
Try to establish a solid credit mix. Multiple credit accounts and a variety of credit types, such as installment loans like mortgages or auto loans and revolving credit like credit cards and some home equity loans, are preferred by the FICO® credit-scoring model. This implies that you shouldn’t be afraid to borrow wisely when the time is right—it doesn’t mean you should take on debt you don’t need.
Make sure you pay your bills on time. One of the best ways to raise credit scores is to avoid making late payments and to pay off past-due accounts. Establish a system and stick to it. Find an automated solution that works for you, whether it be sticky notes and paper calendars or smartphone reminders and automatic bill-payment services. After about six months of perseverance, you’ll start remembering things without being reminded—but just in case, keep the reminders handy).
What’s so good about a good credit score
A short credit history with sound credit management practices may be reflected in a good credit score. Additionally, it could indicate a longer credit history tainted by a few errors along the way, like sporadic missed or late payments, or a propensity for relatively high credit usage rates.
Lenders see people with scores like yours as solid business prospects. With a good credit score, most lenders will give credit to borrowers; however, they might not give their best interest rates, and card issuers might not give you their most alluring rewards and loyalty bonuses.
How I Increased My Credit Score From 720 to 800 (Increase Any Score Like This)
FAQ
How much can you borrow with 720 credit score?
What credit limit can I get with a 720 credit score?
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Credit category
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Credit score range
|
Average credit line
|
|
Super prime
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720-850
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About $10,000
|
|
Prime
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660-719
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Less than $6,000
|
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Near prime
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620-659
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About $3,000
|
|
Subprime
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580-619
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About $2,000
|
Is a 720 credit score good enough to buy a house?
What is a 720 credit score good for?
What credit card can I get with a 720 credit score?
The best store-affiliated credit card you can get with a 720 credit score is the Amazon Credit Card, which has a $0 annual fee and offers a 1 – 5 points per $1 ($100 for Prime members) after approval. It is available to people with good credit and can be used anywhere Visa is accepted.
Is a 720 FICO ® score good?
A 720 FICO ® Score is Good, but by raising your score into the Very Good range, you could qualify for lower interest rates and better borrowing terms. A great way to get started is to get your free credit report from Experian and check your credit score to find out the specific factors that impact your score the most.
Can you get a personal loan with a 720 credit score?
The top-of-the line rewards cards may be out of reach, but you’ll likely be able to qualify for decent cards with rewards or cash back. A 720 credit score will likely give you a choice of personal loans. It’s not a guarantee, though, because lenders look at many factors to arrive at a decision on approval.
What percentage of people with a 720 FICO ® score have a mortgage?
39% Individuals with a 720 FICO ® Score have credit portfolios that include auto loan and 31% have a mortgage loan. Public records such as bankruptcies do not appear in every credit report, so these entries cannot be compared to other score influences in percentage terms.