Is a 700 Credit Score Good
A credit score of 700 or higher is generally considered a good credit score. With a 700 credit score, most borrowers are eligible for just about any type of financing and usually qualify for low interest rates on home loans, car loans, and credit cards. Still, there could be a few things lurking in your profile that could be preventing you from having an even higher score, and may even disqualify you from borrowing money from a conventional lender.
Missed Payments and Charge-offs
While a 700 credit score is a good score, it’s not a great score. Often times, those with a 700 credit score are generally doing things right, and could easily have a much higher score, but there are one or two things on their credit report dragging them down. While it is unlikely someone with a 700 credit score has several late payments, unpaid bills, and charge-offs, it could be possible that there could be something you missed, hiding somewhere deep inside your credit report. Most often, something that slipped through the cracks such as an unpaid medical or utility bill, a wireless bill or some other miscellaneous charge that you lost track of a couple years ago could be reporting on your credit report even though you no longer receive bills from the original lender or collector. It is very wise, even for people who feel like they’re on top of their credit, to periodically check their credit report to ensure something hasn’t been forgotten that could turn into an even more significant issue in the future.
Another common reason for a credit score that could be doing much better than 700 is errors in reporting from an old account, or even a current account. These types of errors happen much more often than you may think, and seemingly insignificant errors can have a drastic effect on your credit score. This is another case in which checking your credit report periodically, can help you take your 700 credit score to new heights. Checking your credit report and contacting any listed account that you feel is reporting information incorrectly can clear things up and help increase your credit score. Examples of this could be an old credit card account showing a high balance, a current installment loan showing all payments are on time but that the principle balance has remained unchanged since the loan originated, an account that shows late payment, or an account that shows charged off that you have already paid off.
When you have a 700 credit score, you’re doing pretty good. Some people do this without even trying, just by paying all of their bills on time. The difference between a 700 credit score and a 750 credit score however, could be as simple as reigning in your account balances. For example, if you add up your total combined credit limit on all of your revolving credit lines combined, and the amount you owe is more than 20% of this number or less than 5%, you are most likely pulling down your credit score. If you have installment loan balances that are still fairly close to the original loan amount, this too can have a negative effect on your credit score. It is always important to consider how much of your credit you are using, because the banks will use this information to consider how much new debt you can safely take on.
Can I Improve My 700 Credit Score
When you already have a credit score of 700 or higher, improving your score can be very simple, but often requires more time than would be necessary when trying to improve a lower credit score. Other than the few issues mentioned above that could be hindering an otherwise better score, building up from a 700 credit score basically involves doing more of the same and just waiting for this to result in a higher score which can take years.
Age Your Credit
The age of your credit is strongly considered when reporting agencies calculate your credit score. While you may have done all the right things to get where you are today, if the average age of your credit lines is low, you may just have to wait. You will usually see peak improvement when the average age of your accounts is around 5 years old.
Number of Accounts
It is possible to have a 700 credit score with just 1 well aged account with good payment history, however many lenders will look into your credit report and consider this insufficient credit history regardless of your score. It is also important to note, that your score will most likely not go any higher than this without some credit building. Most people with top credit scores usually have around 20 accounts or more.
Just about everyone has at least one credit card, but when calculating your score, the banks and credit rating agencies are also considering your experience with different types of credit. It is important to have different types of accounts showing on your credit report. Installment loans such as a car loan, mortgage loans, store credit card, major credit cards, and student loans are all different types of credit in the eyes of the credit bureaus. Having a diverse credit report is looked upon favorably and can drastically improve your score. This can also help with the number of accounts you have, but if you only have one or two types of accounts now, opening these new accounts will impact the average age of your accounts. Again, diversifying your account types can greatly improve your credit score, but it can take time.