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A credit score of 700 is considered good by both major credit scoring models – FICO and Vantage Score. I recently checked my credit score, and I have a credit score of 700. Is that good? Is 700 a good credit score? It means you have very good to exceptional credit health, allowing access to affordable interest rates from most lenders. However, a score above 740 is ideal for the best rates.
In this article, we will discuss credit score ranges, factors that affect credit scores, what constitutes a “good” score under different models, and how to improve a score of 700.
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Credit Score Ranges
It's worth noting that FICO and Vantage Score apply distinct criteria when determining scoring ranges. It is crucial to comprehend these differences to make informed decisions when managing your credit score.
FICO Scores:
• 800-850 = Exceptional
• 740-799 = Very Good
• 670-739 = Good Credit Score → 700 is at the upper end of the ‘Good’ range
• 580-669 = Fair Credit
• Below 580 = Very Poor
Vantage Scores:
• 750-850 = Excellent Credit Score
• 700-749 = Very Good
• 650-699 = Good Credit Score → 700 is at the upper end of the ‘Good’ range
• 601-649 = Fair Credit
• Below 600 = Very Poor Credit
A credit score of 700 is that good credit health, even if it's not a top-tier score. It signifies financial stability, the ability to repay loans on time, and effective financial management, which lenders view positively.
What Affects Your Credit Scores?
Both FICO and Vantage Score credit scoring models weigh several factors when calculating an individual's credit score. It's important to understand these factors and their impact on your credit score in order to maintain a healthy credit profile. These factors largely overlap between the two scoring models and include a variety of key elements :
• Payment history (carries most weight) – No late pay optimizes scores.
• Credit utilisation rate – Lower debt-to-limit ratios are better. Under 30% ideal.
• Credit history length – Long, well-aged accounts aid scoring.
• Credit mix types – A balanced mix of credit types improves this factor.
• New credit checks – Too many new applications hurt through hard inquiries.
Careful usage of credit cards entails timely payments, sustained utilization at a minimum, establishing credit history, and augmentation of credit types. It is crucial to ensure that payments are made punctually, balances are kept low, credit history is established, and credit types are diversified. These practices are instrumental in building and maintaining a positive credit score.
A good FICO score?
According to Fair Isaac Corporation, FICO credit scores above 670 qualify as Good to Exceptional credit health. However, crossing the 740 threshold accesses the top-tier rating, unlocking the best borrowing rates from mainstream lenders. FICO considers scores:
• Over 800 = Exceptional Credit
• 740-799 = Very Good Credit
• 700-739 = Good Credit
If your score is 700 - 739, you meet general creditworthiness standards for affordable interest rates but may not qualify for the absolute lowest rates reserved for Very Good and Exceptional tier applicants.
A Good Vantage Score?
Vantage Score, a credit-scoring model, has set its score thresholds slightly higher than the standard FICO scoring models. Vantage Score recommends that individuals aim for a score exceeding 750 for optimal interest rates. The Vantage Score tiers are categorized based on creditworthiness and are used by lenders to determine the risk of lending to individuals. These tiers include:
• 750-850 = Excellent Credit
• 700-749 = Very Good Credit
• 650-699 = Good Credit Score
By Vantage Score’s criteria, is 700 a good score, as it is just shy of Very Good status. So it’s still adequate for approval at decent rates from mainstream lenders but misses the credit elite echelon.
How to Improve Your 700 Credit Score
While 700 signifies overall financial responsibility, optimising even a very good score taps access to the most competitive interest rates, and lending offers, saving substantially on borrowing costs long-term. Improving from 700 targeting upper-700s/800+ entails fine-tuning credit utilization and bolstering length/mix factors:
• Lower credit utilization under 30% ideal
• Pay balances in full every month
• Let account ages grow over time
• Periodically open installment loans
You can boost your scores and elevate yourself to a higher by consistently practicing good financial habits. A modest increase from 700 to 740+ can lead to significant interest savings, thanks to more favorable rates. So, don't hesitate to improve your financial health and achieve better financial outcomes in the long run.
Conclusion
A credit score of 700 earns a very good assessment, indicating positive financial behaviors. However, maximising even very good scores accesses exceptional borrowing costs reserved for higher score tiers. Fine-tuning utilisation, allowing account aging, and adding credit mix variety over time responsibly lifts scores into upper ranges for big savings on expensive loans.
