Did you know that the average credit score in America is 714?
If you’re also close to this number, then you might be wondering if a 700 credit score is good. Credit scores can seem random since they change each month, but the science behind these rankings is quite simple.
Would you like to learn more about what your credit score means and what you can do to improve it? Read on to learn all the important facts.
Credit Score Rankings
In order to understand if your credit score is good, you need to know how financial institutions rank each credit range. The lowest you can score is 300, and the highest is 850.
If your number falls between 300 to 579, your ranking is classified as poor. 580 to 669 is fair, 670 to 739 is good, and 740 to 799 is great. If you can break anywhere into the 800s, then your credit score is excellent.
Knowing this, it’s a relief that a 700 credit score is categorized as good. However, you can see that there’s still plenty of room for improvement.
Credit Factors Worth Knowing
You may have noticed that your score fluctuates each month. The reason why is that there are several factors that can raise or lower your score. Instead of worrying about these frequent changes, you can use them as motivation to adopt better habits to constantly improve.
People with high credit scores have a history of making payments on time. They also keep their credit utilization ratio low, which means that they don’t borrow the maximum amount of credit they’ve been granted on a regular basis.
It’s also useful to know that the length of your credit history matters as well. If you’ve proven to be a responsible borrower for many years, then your credit score will reflect that. When you open up new lines of credit, your score may go down for a while since these new accounts impact your history.
The last major factor that will influence your score is your credit mix. Financial institutions like to see that borrowers can handle a variety of loans. Having student loans, mortgages, credit cards, and other types of credit is good for your portfolio.
Credit Score Tips
Maintaining good credit is crucial for many things in life. Renting an apartment, getting approved for loans, and buying a car are all possible thanks to your credit score. There are lots of things you can do to boost that number if you’d like to rank even higher.
The most important thing you can do is always stay on top of your payments. If you have the funds, then you should consider paying down your debt faster so you can reduce your credit utilization ratio.
Try to avoid opening a bunch of new credit lines at once.
Is a 700 Credit Score Good? Now You Know the Facts
As you can see, having a 700 credit score is something to be proud of. If you’d like to rank even higher, now you know how to improve.
Would you like more personal finance advice? Look around our blog for more helpful advice.