In a Nutshell: Higher credit scores can lead to better credit opportunities, such as approval for credit cards or favorable terms on loans. But knowing exactly what it means to have good credit is a challenge. More than 100 million members use Credit Karma to help them understand and work on their credit scores. Here’s what it means to have good credit and what you can do to maintain it. Editorial Note: Intuit Credit Karma receives compensation from third-party advertisers, but that doesn’t affect.
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A 706 FICO® Score is a good credit score. It falls within the range of scores, from 670 to 739, which are considered Good. The average US FICO® Score, 714, falls within the Good range. Lenders view consumers with scores in the good range as “acceptable” borrowers, and may offer them a variety of credit products, though not necessarily at the lowest-available interest rates.21% of U.S. consumers’ FICO® Scores are in the Good range.Approximately 9% of consumers with Good FICO® Scores are likely to become seriously delinquent in the future.
How to improve your 706 Credit Score
A FICO® Score of 706 provides access to a broad array of loans and credit card products, but increasing your score can increase your odds of approval for an even greater number, at more affordable lending terms.Additionally, because a 706 FICO® Score is on the lower end of the Good range, you’ll probably want to manage your score carefully to prevent dropping into the more restrictive Fair credit score range (580 to 669).46% of consumers have FICO® Scores lower than 706
Checking your FICO® Score is the best method to find out how to raise your credit score. You’ll get information about your score as well as strategies to raise it based on particular details in your credit report. You’ll find some good general score-improvement tips here.
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.
Late payments (past due 30 days) appear in the credit reports of 29% of people with FICO® Scores of 706.
Lenders see people with scores like yours as solid business prospects. Most lenders are willing to extend credit to borrowers with credit scores in the good range, although they may not offer their very best interest rates, and card issuers may not offer you their most compelling rewards and loyalty bonuses.
How to keep on track with a Good credit score
Having a Good FICO® Score makes you pretty typical among American consumers. That’s not necessarily a bad thing, but you can raise your score to the Exceptional (800-850) or Very Good (740-799) range with a little more time and effort. Understanding the actions that raise your score and those that lower it will be necessary to move in that direction:
Among the biggest factors affecting your credit score are missed and late payments, and these are bad factors. Lenders prefer borrowers who make their payments on schedule, and statisticians estimate that late payers are more likely to default on their debt (i.e., let it go 90 days overdue) than on-time payers. If you’ve previously missed or made late payments, breaking the habit will have a positive impact on your credit score. The percentage of your score that is affected by late or missed payments is greater than one-third (35%) of your total score.
Technically speaking, utilization rate, also known as usage rate, indicates how near you are to “maxing out” your credit card accounts. By dividing each outstanding balance by the card’s spending limit and multiplying the result by 100, you can calculate utilization on an account-by-account basis. By totaling all of the balances and dividing by the total of all spending limits, you can find your overall utilization rate:
BalanceSpending limitUtilization rate (%)MasterCard$1,200$4,00030%VISA$1,000$6,00017%American Express$3,000$10,00030%Total$5,200$20,00026%Most experts agree that utilization rates in excess of 30%—on individual accounts and all accounts in total—will push credit scores downward. The closer you get to “maxing out” any cards—that is, moving their utilization rates toward 100%—the more you hurt your credit score. Utilization is second only to making timely payments in terms of influence on your credit score; it contributes nearly one-third (30%) of your credit score.
It’s old but it’s good. All other factors being the same, the longer your credit history, the higher your credit score likely will be. That doesn’t help much if your recent credit history is bogged down by late payments or high utilization, and there’s little you can do about it if you’re a new borrower. But if you manage your credit carefully and keep up with your payments, your credit score will tend to increase over time. Age of credit history is responsible for as much as 15% of your credit score.
New credit activity typically has a short-term negative effect on your credit score. Any time you apply for new credit or take on additional debt, credit-scoring systems determine that you are greater risk of being able to pay your debts. Credit scores typically dip a bit when that happens, but rebound within a few months as long as you keep up with your bills. Because of this factor, it’s a good idea to “rest” six months or so between applications for new credit—and to avoid opening new accounts in the months before you plan to apply for a major loan such as a mortgage or an auto loan. New-credit activity can contribute up to 10% of your overall credit score.
A variety of credit accounts promotes credit-score improvements. The FICO® credit scoring system tends to favor individuals with multiple credit accounts, including both revolving credit (accounts such as credit cards that enable you to borrow against a spending limit and make payments of varying amounts each month) and installment loans (e.g., car loans, mortgages and student loans, with set monthly payments and fixed payback periods). Credit mix accounts for about 10% of your credit score.
39% Individuals with a 706 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. If one or more is listed on your credit report, it can outweigh all other factors and severely lower your credit score. For example, a bankruptcy can stay on your credit report for 10 years, and may shut you out of access to many types of credit for much or all of that time.
How to build up your credit score
Your FICO® Score is solid, and you have reasonably good odds of qualifying for a wide variety of loans. But if you can improve your credit score and eventually reach the Very Good (740-799) or Exceptional (800-850) credit-score ranges, you may become eligible for better interest rates that can save you thousands of dollars in interest over the life of your loans. 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. Marking steady upward progress (recognizing that occasional dips are par for the course) is good incentive to maintain healthy credit habits. And monitoring will also alert you to any sudden credit-score drops, which may be a sign of unauthorized activity on your credit accounts.
Avoid high credit utilization rates. High credit utilization, or debt usage. The FICO® scoring system bases about 30% of your credit score on this measurement—the percentage of your available credit limit represented by your outstanding payment balances. Try to keep your utilization across all your accounts below about 30% to avoid lowering your score.
Consumers with good credit scores have an average of 4.5 credit card accounts.
Try to establish a solid credit mix. The FICO® credit-scoring model tends to favor users with multiple credit accounts, and a blend of different types of credit, including installment loans like mortgages or auto loans and revolving credit such as credit cards and some home-equity loans. This doesn’t mean you should take on debt you don’t need, but it suggests you shouldn’t be shy about prudent borrowing as appropriate.
Make sure you pay your bills on time. Avoiding late payments and bringing overdue accounts up to date are among the best things anyone can do to increase credit scores. Establish a system and stick to it. Whether it’s automated tools such as smartphone reminders and automatic bill-payment services or sticky notes and paper calendars, find a method that works for you. Once you’ve stuck with it for six months or so, you’ll find yourself remembering without being nagged (but keep the reminders around anyway, just in case).
Learn more about your credit score
A 706 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. Read more about score ranges
Credit mix and types
Demonstrating to lenders your ability to manage different forms of credit, such as installment loans and revolving credit (such as credit cards) is beneficial. However, we don’t advise taking out a loan you don’t need in order to establish credit because this usually has less of an effect on your credit.
A hard inquiry is typically made to your credit reports when you apply for a new credit card or loan. On its own, a single hard inquiry should only have a small impact on your credit. But the more hard inquiries you collect, the bigger the impact could become. Additionally, making too many hard inquiries in a short period of time could cause some lenders to hesitate, so it’s a good idea to apply for credit products only when absolutely necessary and when you are comfortable with your chances of being accepted.
How to get a 706 credit score
There are many things you can do to establish and keep your credit within a range, even though there is no foolproof method to obtain a specific credit score. Most importantly, you’ll want to practice healthy credit habits.
Certain general guidelines still hold true despite the wide range of credit scores that exist due to various credit bureau data and scoring models. Most credit scores take into account at least five main credit factors.
Here’s a breakdown of each factor and how it can affect your overall credit.
One of the more important factors in determining your overall credit health is your record of on-time payments. It’s that simple: Establishing credit can be greatly aided by consistently making on-time bill payments. Conversely, a single late payment can have a substantial impact on your scores and remain on your records for a maximum of seven years. So, consistency is key.
As you may already be aware, avoiding interest charges is possible when you pay off the entire balance on your credit card statement each month. However, it might also assist in reducing your credit utilization ratio—a crucial indicator of how much of your available credit you actually use each month. While the majority of experts advise maintaining your credit utilization ratio below 30%, it’s a good idea to keep it even lower if at all possible.
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FAQ
How good is a 706 FICO score?
Can I buy a house with a 706 credit score?
What is considered an excellent FICO credit score?
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FICO Credit Score Ranges
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Excellent/Exceptional
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800-850
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Very good
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740-799
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Good
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670-739
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Fair
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580-669
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What is the average FICO score?
Is a 706 credit score a good credit score?
Our content is accurate to the best of our knowledge when posted. A 706 credit score is considered a good credit score by many lenders. “Good” score range identified based on 2023 Credit Karma data. With good credit scores, you might be more likely to qualify for mortgages and auto loans with lower interest rates and better terms.
What is the average interest rate on a 706 credit card?
You can expect an average interest rate of 13.5 to 16.5 percent on most credit cards. A 706 credit score is not a guarantee of credit card approvals. If you’ve filed bankruptcy in the past, have a low income or have a history of opening credit cards frequently, you can still be denied.
Is 700 a good FICO score?
Luckily, the answer is yes: a score of 700 falls into the “good” category, which includes any number between 670 and 739. Approximately 21 percent of American consumers hold a FICO score in the good range. Your 706 score will give you access to more loan options and better interest rates than people in lower ranges.
Can you get a car loan with a 706 credit score?
You should be able to get approved for a decent car loan with a 706 credit score, considering that more than 60% of all auto loans go to people with credit scores below 740. Still, it’s important to compare your auto loan options carefully if you want to get a low APR.